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www.bluevisions.com.au
Asset Management Council
Maintenance Engineering Society of Australia Inc
Strategic Project Management
29 July 2009
www.bluevisions.com.au
Contents
Industry Examples of•Closing the gap between service delivery and project scope•Establishing the project team, structure and communications protocols
•Selecting the appropriate delivery model •Risk assessment and management •Project planning and controls and how to inform design •Planning and controlling programs and major rollouts•Project tracking and how to have the upper hand when disputes arise
•Building capability to meet corporate objectives
Sorry no PMBOK today.
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Closing the gap between service delivery and project scope
Development of Health Facilities•Starts with understanding the services needs:
– A Health Service Plan is developed that prioritises current or future service delivery issue and/or gap.
– Examples could be patients needing to travel to city hospitals for routine orthopedic surgery, or, excessive waiting times for orthopedic surgery.
– This is submitted for approval by the Area Health and the NSW Health
•Inputs into Service Delivery Needs– APPI which provides data relating to trends and projection of the orthopedic
services needs– IPART, which provides data about the supply and demand for services – NSW Health Population Projections, which provides population data to
2038
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Closing the gap between service delivery and project scope
Development of Health Facilities•Develop the Asset Strategic Plan
– identifies current buildings and services which may or may not be suitable for expansion to cater for the new orthopedic service, or
– A new building required.
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Closing the gap between service delivery and project scope
Development of Health Facilities•Service Procurement Plan (SPP)
– Instigated once the proposed service development is aligned with the NSW State Health Plan and Future Health Directions for NSW to 2025,
– The NSW Process of Facility Planning (POFP) is the guideline to develop an SPP.
•The objectives of the SPP are to: – Identify the preferred option to meet the service gap– Identify the strategy for the preferred option (capital or non-
capital) – Identify both capital and recurrent costs for the preferred
option
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Closing the gap between service delivery and project scope
Development of Health Facilities•SPP Development involves an intensive iterative consultation process in which service, clinician and community needs and wants are investigated and reviewed within the NSW Planning parameters.
•Tools used to clarify and confirm the preferred recommended options include:
- Value Management Study- Economic Evaluation - Financial Impact Statement- Gateway Review
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Closing the gap between service delivery and project scope
Development of Health Facilities•SPP Development Challenges:
– The range and number of stakeholders included in this iterative process. – Stakeholders have a diverse range of expectations, needs and wants – Education of stakeholders about their roles, responsibilities and
accountabilities for their input into the SPP – Stakeholders often expect to address service delivery issues with a capital
solution – Mismatches about service requirements can occur– Personnel changes which can impact on the timeframe and cause rework– Meeting Government’s timeframes to submission and approvals – Stakeholder agreement on the preferred options. The Value Management
Study is the process used to address and reach agreement.
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Closing the gap between service delivery and project scope
Development of Health Facilities•NSW Health uses the SPP recommendations to populate the NSW Health Forward Asset Acquisition Plan for NSW Treasury and if required Cabinet approval.
•Approvals for each planning phase are confirmed annually during the NSW Budget process in Budget Paper 4.
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Closing the gap between service delivery and project scope
Development of Health Facilities
•Development of the Project Definition Plan (PDP) – PDP consists of but is not limited to the development of a
design brief, service model, operational policies, site planning, room sizes, equipment requirements and project budge
•Once the PDP is approved you start schematic Design.•The PDP continues to be the base scope document that is used for change control for the life of the project.
•The process from start to completing a PDP can be between 1.5 years to 3 years.
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Establishing the project team, structure and communications protocols
Development of Health Facilities•Establish the Project Team
– considered all available options when planning the core project team including any potential conflicts and available time;
– Determine what may influence their preferences and thinking on the current project;
– Ddetermined the ability to influence to the project outcomes; – Established some common short term core project team
KPI’s – Workshop and agree success criteria and lessons learned
from previous projects – Plan for the high likelihood of changes within the core
project team;
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Establishing the project team, structure and communications protocols
Development of Health FacilitiesStructure and Communications Protocols
•Prepare a Governance Plan and communications strategy and agree them
•The Communication protocols are in two parts, – Internal Project team – External and media statements and responding to the community groups
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Unite Team with Clear Statement of Outcome and Purpose of Project that has universal buy-in
Project “Leaders” focus on Outcomes / Results – “doing the right things” AND “doing things right”
Project “Administrators” focus on Outputs / Objectives i.e. “doing things right” often at the expense of “doing the right things”
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Have an agreed vision
Supplement “To build a modern, 3-storey Police Quarters in Bathurst”
with
“To enhance the image, professional and emotional well-being of our police force by successfully completing the development of a state-of-the-art office complex in Bathurst on time and within budget. This will give them a place they can look
forward to going to work every day and enhance the public’s perception that their security is assured by a police force that is forward looking and in touch with its
needs. In the journey of completing this magnificent project, I see stakeholders who are proud of their achievements, and have considerable belief in what they can
achieve, if they believe. My organisation’s already glowing reputation is enhanced even more by the highly efficient and effective job we have done. The next project with our client is already well advanced in its planning. I feel a great sense of pride
that my team members have had a fantastic learning experience – they have stepped up to every obstacle with tremendous teamwork. The group dynamics are positive and stimulating. We have been nominated for several industry awards and this is
truly the icing on the cake.”
CREATES FOCUS & MOTIVATION
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Document Roles & Responsibilities
‘Org’ Chart
Position Description
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RACI / RASCI Chart
Activity / Stakeholders A B C D E
Design R A
Coding A R S C
Unit Testing RA I I
Quality Assurance RA C
Documentation A R S
R = Responsible - owns the problem / project A = to whom "R" is Accountable - who must sign off (Approve) on work before it is effectiveS = Supportive - can provide resources or can play a supporting role in implementation C = to be Consulted - has information and/or capability necessary to complete the work I = to be Informed - must be notified of results, but need not be consulted
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Be Aware of the 5 dysfunctions of Teams
Source: Lencioni, P (2002), “The Five Dysfunctions of a Team”, John Wiley & Sons
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Communications Protocols
•Face-to-face wherever possible (including videoconference)•Confirm through email for audit trail•Communicate relevant information to right parties•If you need to escalate an issue, it could mean that either you have not communicated urgency clearly or your relationship with stakeholder is weak•Be aware about possible negative impact of escalations,
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Meeting Guidelines
•Have a clear objective and agenda•Be thorough and well-prepared•Know your audience•Variety creates vitality•Celebrate success•Give feedback•Keep it short•Consider emotional states created•Convey confidence and certainty
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Selecting the Appropriate Delivery Model
•Major Airport Facility– Time is critical as new A380 Planes arriving
– Facility to be upgraded while occupied– Need flexibility to suit ongoing operational needs– OH&S risks are significant
•Typical factors that affect selection of Delivery Model – Time pressures
– Risk allocation and sharing– Flexibility required in ongoing design, construction and existing
operations– Potential for innovation
– Cost management
– Early involvement of contractors
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Selecting the Appropriate Delivery Model
•Typical models– Fully documented
– D&C
– DD&C
– GMP
– CM
– MC
– Allowancing
– Combination of the above
•Other considerations – Staging of works
– Early works / packages
– Site management when more than one contractor engaged
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Risk Assessment & Management
What is Risk Management?
The culture, the processes, and the structures that are directed towards realizing potential opportunities whilst managing adverse effects.
What is Risk Management Process:
Establish Context
Identify Risks
Analyse Risks
Evaluate Risks
Treat Risks, and
Always Communicate, Consult, Monitor and Control
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What is Risk?
The chance of something happening that will have an impact on objectives.
Risk = Consequence X Likelihood
Probability or Frequency of an
event (qualitatively or quantitatively)
Outcome or impact of an
event
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Risk Management Process
CO
MM
UN
ICA
TE
AN
D C
ON
SU
LT
MO
NIT
OR
AN
D R
EV
IEW
Establish the Context
Analyse Risks
Evaluate Risks
Treat Risks
Identify Risks
RIS
K A
SS
ES
SM
EN
T
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Analyse Risks (Qualitative)
Qualitative methods for generating information for risk analysis include:
• Evaluation using multi-disciplinary groups;
• Specialist and expert judgment; and
• Structured interviews and questionnaires.
Like
liho
od
Pro
bab
le
Medium
Risk
High
Risk
Imp
rob
able
Low
Risk
Medium
Risk
Minor Major
ConsequenceCell values = Risk units for ranking only
Qualitative Representation
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Analyse Risks (Semi-Quantitative)
In Semi-Quantitative methods, qualitative scales such as those described are given values.
Semi-Quantitative Representation
Freq
uen
cy
0.1 10 30 100 3000.01 1 3 10 300.001 0.1 0.3 1 30.0001 0.01 0.03 0.1 0.3
(Events/yr) V.Low 100
Low
300
Medium
1000
High
3000
Consequence ($ x 1000)
Cell values = Risk units for ranking only
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Analyse Risks (Quantitative)
Quantitative analysis uses numerical values for both consequences and likelihood using data from a variety of sources.
These may include:
•statistical analysis of historical data•influence diagrams•life cycle cost analysis•simulation and computer modelling•statistical and numerical analysis•probability analysis
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Treat Risks
What is Risk Treatment?
process of selection and implementation of measures to modify risk
Options for treating risks with negative outcomes:
Avoiding the risk
Changing the likelihood of the risk
Changing the consequences
Sharing the risk
Retaining the risk
Action Plan defines: RESPONSIBILITY, RESOURCES, BUDGET, TIMETABLE, REVIEW, COMMUNICATION, and Cost-Benefit Analysis.
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Monte Carlo Simulation
•3 Point estimate for Duration and Cost•Takes Uncertainty Into Account
10d
--/--/--
8d 10d 15d
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Monte Carlo Simulation
Distribution Graph shows the likelihood (probability), if any, of completing the project by the planned finish date (Deterministic).
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Monte Carlo Simulation
Tornado Graphs - helps identify the tasks that impact the planned finish date the most
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Case Study 1 – BBA
Ballina Bypass Alliance (Leighton)
Project scope: 4 lane bypass, total of 12.5 km, a number of bridges
Project duration: 4 years
Project TOC: $400m
Problem
Sensitivity of construction programme to RAIN
Possible solutions
Deterministic Analysis
Probabilistic Analysis
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Case Study 1 – BBA
Deterministic Analysis
Rain days per year based on the rain database from 1892 to 2006
Number of rainy days in the
construction programme???
Historical RainfallDatabase for Ballina
(1892 - 2006)
Statistical information Mean = 56
Median = 52Max = 176
Number of rain days(56 NW days/year)
Managerial review and judgmentRain Contingency
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Case Study 1 – BBA
Probabilistic Analysis
Deterministic Analysis plus Quantitative Risk Analysis
Number of rainy days in the
construction programme???
Historical Rainfall Database for Ballina
(1892 - 2006)
Statistical information Mean = 56
Median = 52Max = 176
Probability DistributionSimulation
Quantitative Risk Analysis
Managerial review and judgment
Rain Contingency@
Activity LevelProgramme Level
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Case Study 1 – BBA
Forecast from Probabilistic Analysis
P(X)Rain
Calendar
Working Day/Yr
(With Rain)
Wet Weather Factor
Impact on Contract
Completion
P5Earthwork 184 0.20
+ 2 MonthsStructure 203 0.12
P50Earthwork 168 0.27
+ 1 MonthStructure 193 0.16
P70Earthwork 163 0.29
CURRENTStructure 190 0.17
P85Earthwork 157 0.32
- 1 MonthStructure 187 0.19
P99Earthwork 133 0.42
-10 MonthStructure 151 0.34
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Case Study 1 – BBA
Actual results after one year
0
2
4
6
8
10
12
14
16
Ju
n-0
8
Ju
l-08
Au
g-0
8
Se
p-0
8
Oc
t-08
No
v-0
8
De
c-0
8
Ja
n-0
9
Fe
b-0
9
Ma
r-09
Ap
r-09
Ma
y-0
9
Mo
nth
ly R
ain
fall (
Da
ys
)
0
20
40
60
80
100
120
140
160
Cu
mu
lati
ve
Ra
infa
ll (
Da
ys
)
MONTHLY RAINFALL ALLOWANCE
MONTHLY ACTUAL RAINFALL
CUMULATIVE RAINFALL ALLOWANCE
CUMULATIVE ACTUAL RAINFALL
Deterministic Analysis: 56 daysProbabilistic Analysis: 68 days – 85%
Management Decision: 63 daysActual for first year: 72 days
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Project Planning & Control and How to Inform Design
Understand Project Strategic Requirements and Why They Are Important to the Client, such as
– Most efficient time frame to deliver a project
– Contractual obligations handover and staging
– Penalties
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Project Planning & Control and How to Inform Design
•The opportunity exists to identify and promote alternatives that may improve on the original first pass and / or Project Strategic Requirements.
– Location of elements such as expansion joints or common areas, may enable various construction methodology options
– Reducing the complexity of the design while still achieving the brief such as a consolidated structural design as compared to many integrated structural types
– Altering the design while still achieving the brief such as pre cast in lieu of masonry walls
– Relocating critical elements off the main work flow such as removing complex plant room services from the roof plant room to the basement plant room
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Project Planning & Control and How to Inform Design
•Case Study 1: Energy Australia Zone Substation •The original design consisted of:
– A full basement level– Additionally the basement was stepped, the lower level was
approximately 2.8 m deeper for the 132 KV cabling– Structural design from ground level consisted of insitu concrete columns
integrated with reinforced concrete blocks
•Gross construction time: 19 months•Revised design based on feedback provided by blueVisions consisted of:
– No step to the basement level– Step to the 132 KV cable room now located at the ground level to
maintain height requirements– Precast concrete structural walls from ground level
•Gross construction time: 17 months
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What is a program?
“a temporary flexible organisation created to co-ordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver outcomes and benefits related to the
organisations strategic objectives.”
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What is Program Management?
Program management is the management of a group of
projects and or operations to achieve business targets, goals,
or strategies, and may or may not have a defined end point.
(James. T Brown, The Handbook of Program Management)
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Program Life Cycle
Identifying a programme
Defining a programme
Delivering the capability
Realising the benefits
Closing a program
Examples of program life cycles
Formulate Organise Deploy Appraise Dissolve
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Program Management Standards
1. Project Management Institute (PMI) Program Management standard and its associated professional exam, PgMPSM (Program Management Professional)
2. Managing Successful Programmes (MSP), published by the Office of Government Commerce in the UK
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What is Benefits Management?
The process of organising andmanaging, so that potential benefits, arising from investment in change, are actually achieved.
www.sigma-uk.com
… a continuous managementprocess running throughout the programme.
OGC (2007): Managing Successful Programmes
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What is Benefits Management?
Benefits realisation management is common sense but not common practice.
Gerald Bradley (2006): Benefit Realisation Management:
A Practical Guide to Achieving Benefits Through Change
Measurable improvement resulting from an outcome which is perceived as an advantage by a stakeholder. Benefits are anticipated when a change is conceived.
OGC (2007): Managing Successful Programmes
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Begin with the End in Mind
Successful benefits management begins with clearly defined end goals and a properly planned route to reach them
It is not that organisations do not know the goals they seek – more that the goals are often poorly framed:
Expressed in terms of delivering a capabilitySeldom adequately shared or ownedFrequently unrealistic with no defined route mapOften requires a leap of faith – waiting for miracles
Horse before cart – define outcome, identify capability
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A Continuous Process
Not about ticking boxes and validating past decisions
Active & dynamic process to maximise future returns
Make adjustments to meet strategic objectives
Derive new benefits in flight, minimise unwanted side effects
Re-deploy resources freed up through efficiencies delivered
… a continuous managementprocess running throughout the programme.
OGC (2007): Managing Successful Programmes
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BenefitsIdentification
Optimise Benefits Mix
Track & Realise Benefits
Review & Maximise Benefits
Benefits Management Strategy
Benefits Realisation Plan
Organisational Goals & Targets
Benefits Management Process
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If you don’t know where you’re going, any path is as good as another … but you won’t realise you’re lost, you won’t know what time you’ll get there, you might unknowingly be going in circles, and other won’t understand how they can help. And, since you could pass by without knowing it, you won’t get the satisfaction of having arrived!
Lewis Caroll: Alice in Wonderland
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Planning and controlling programs and major rollouts
•Case Study : BER Program Stimulus Package – 2 regions.– 10 sub-regions– 374 schools– Multiple buildings per school– Multiple phases per building– Multiple disciplines / trades per phase
•The challenge is to have consistency, efficiency of resources and accurate and appropriate reporting.
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Planning and controlling programs and major rollouts
•Consolidated programme– Managing interrelated projects– Cross-project links– Critical Path Investigation across the Program not
Project– Sharing resources across projects– Resource leveling and optimization at the Program
level
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Planning and controlling programs and major rollouts
•Approach– Understand the nature of Program of Work– Understand how resources are shared across the
Program– Understand the scope of projects and the requirements– Develop the Project Programmes individually– Consolidate the projects into the Master Program– Implement cross-project dependencies– Resource allocations within consolidations– Leveling resources within consolidations– Optimization at the Program level
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Planning and controlling programs and major rollouts
Resource Histogram (Rev.0)
Available PM = 18
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Planning and controlling programs and major rollouts
Resource Histogram (Rev.1)
Available PM = 18
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Planning and controlling programs and major rollouts
Resource Histogram (Rev.2)
Available PM = 18
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Planning & Controlling Major Programs
Telecoms Project: • Decision by Hutchison Group to lead the introduction of 3G mobile technology Internationally
• May 2001, Alliance between Hutchison Telecoms (H3GA) and Telecom Corp NZ (TCNZ) formed to introduce 3G into Australia – ‘3’
Objective: • First 3G Operator to Market in Australia
• Convert Mobile offering into Multimedia Offering – Greying the boundaries between Content (Internet) and Mobile Phone technology
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Planning & Controlling Major Programs
Challenges of the Telecoms Project•Cutting edge technology never introduced – Proving technology as project progressed
• Global rollout with International dependencies
• Newly formed organisation (H3GA) established to deliver and then operate – Combination of Building a Business and Delivering a project
• Significant number of vendors – Internationally and Locally – needed to integrate together to achieve the one goal
• Introducing a fundamental shift in the mindset of mobile users – from talk and SMS to content
• Be first to market
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Planning & Controlling Major Programs
Scale of ProjectTechnology •1500+ Base Stations requiring council approval, installation and optimisation • Installation and Configuration of the Core Telecom Network• 40+ Business Support Systems covering Provisioning through to CRM• 30+ Content Based products and enablers• New Billing System• 5+ 3G Handsets with Video Talk and Content capabilityStores• Identify, Build, Fit-out and Commission over 100 stores in Syd, Bris and Melb• Recruit and Train over 500 store and support staffBusiness• Establish, Recruit and Train call centre with over 100 staff• Build Supply Chain capability including Warehousing and Logistics • Sales, Marketing and Finance teams
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Planning & Controlling Major Programs
• Establish a PMO. Responsible to:– Ensuring Objectives and strategies in all departments and within projects
align to the corporate goals and Launch roadmap– Set program and project level milestones– Create Program Governance Structure – Provide mechanism for senior
management progress review, strategic direction changes and key decision making.
– Establish Resource Management Model and Integrate into Governance team responsibilities
– Establish Overall Program Quality Management System (QMS)– Develop/Procure Tools and templates for delivery– Support the development of detailed project management plans, schedules,
costs etc– Establish a holistic Master Schedule to support cross departmental
dependencies and minimise the risk of gaps– Manage Change Control
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Planning & Controlling Major Programs
Delivery Teams
Functional Managers
PMO
Management Team
Executive
• QMS
• Delivery Framework
• Program Delivery Support
• Project Management
• Technical Delivery
• Holistic Resource Management
• Program Tracking & Reporting
• Master Schedule & Financial Report
• Decisions Required (e.g. changes)
• Project Reporting
• Scheduling
• Resource Support
• Technical Compliance
• Escalations
• Progress
• Decisions and Directions
• Governance
• Vendor Management
• Resource Requirements
• Decisions Required
Executive Support and Strategy
Program Structure
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Planning & Controlling Major Programs
Controls •Delivery Gates integrated into Product Development Lifecycle
• Standardised Project Management Templates
• Weekly Status Reporting
• Monthly Management Reporting (Steering Committee) at Program Level
• Master Schedule Tracking, including resourcing
• Base Station Tracking Tool Implemented to allow off-site staff to update and report progress in the field
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Planning & Controlling Major Programs
Result
•Successfully Launched first to market in Sydney, Melbourne and Brisbane in March 2003 – Market Leader
• Delivery of overall program within budget and schedule
• Established Business model for operating the business once 3 was live
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Project Tracking
• Develop high quality, robust project schedule that enables quick and easy tracking and reporting of progress against a baseline.•Develop a project schedule that is of a high standard and robust, i.e. it satisfies the following criteria:
– Has a refined, practical & workable Work Breakdown Structure that aligns with strategic delivery;
– Built with accurate logic to drive the critical path of the project;
– Use of appropriate calendars that reflect working hours for each type of activity
– Application of resources to enable resource tracking and levelling
•Undertake regular data capture from a multitude of sources.
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Project Tracking
•Undertake regular data capture from a multitude of sources.
– Ensure minutes of meetings reflect actual progress– Capture source / evidence of the progress to validate the
status, drawing issue, photos, etc…– Take care of how baseline logic and durations and
movement in forecasts are managed– Have in place a change control process for the schedule– Maintain version tracking – Differentiate between status and what if analysis
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Have the Upper Hand in Disputes
•Start with the following in Mind.– All project information will be relied on in case of disputes– What is obvious and common sense is not– Everything you write or data that you compile must be able to be
validated in the future– The contract is the contract and is not always fair but is still the
contract– Perform your duties under the contract in the times set out in the
contract– Perform your duties in accordance with the contract – keep
emotions and personal feelings out– It is very easy to set a precedent– Other parties to the contract are relying on your statements and
actions and you should accept that– Records and data management is essential – Project Centre,
Acconex, etc….
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Building Project Management Capability
Is Project Management a Strategic Capability?
Project management as a strategic capability resides less in knowledge of the formal methodologies and processes of project management and more in what is often termed, the “soft” side of project
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Building Project Management Capability
•McKinsey’s survey on “why strategy fails” shows that majority (approximately 40%) of strategies fail because organisations lack required capabilities to implement strategic objectives•Strategic capabilities are “intangible” assets that involve a mix of explicit and tacit knowledge embedded in the organisation’s unique internal skills, know-how and people•Project management capability can be viewed as a strategic “intangible” asset – it is knowledge-based, comprises a mix of explicit and tacit knowledge, skills and know-how•Strategic assets are those that are:
– Valuable to the organisation– Rare in the sense that they cannot be easily procured– Inimitable and cannot be easily copied– Have an organisation-wide focus in terms of their
development and exploitation
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Building Project Management Capability
Building a Strategic Project Management Capability
•Organisations where project management has become the source of superior performance share two characteristics.
– They have project leaders who are great at managing relationships, breaking through organisational inertia, occasionally bending the rules to get things done.
– And their organisations recognise and support them.
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Building Project Management Capability
Building a Strategic Project Management Capability
•Project leaders typically have a significant amount of experience working in complex and demanding project-driven organisations. Attributes for their success include:
– Ability to see through complexity and get to the heart of the matter
– A can-do attitude backed by a desire to get things done– Empathy or the ability to see through the eyes of others– Courage to break the rules and work around the system if
required– Optimism – little tolerance for negativity or lack of energy– Excellent political and diplomatic skills– Win and retain loyalty
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Building Project Management Capability
Building a Strategic Project Management CapabilityOrganisations that foster such leaders are characterised by:
– Strong emphasis on cross functional contribution and good citizenship over single function allegiance
– Celebrate accomplishments of the team as well as the project leaders
– Appoint project leaders to management positions and put them in advisory and mentoring roles, and feature them in training and development initiatives
– Take a holistic approach to project management, incorporating tangible (methodologies, processes, templates) and intangible (know-how, leadership, “soft” skills) capabilities
– See rules as means to ends, not as ends to be followed slavishly for their own sake or out of respect for custom
– Actively avoid blame culture
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Building Project Management Capability
Building a Strategic Project Management Capability•Capability development is a slow, incremental and time consuming process.•Developing a strategic project management capability goes to the heart of the business – it impacts how customers are served, how products are developed, how the business is managed.•Analyse before you optimise - Identify the opportunities, conduct benchmarking exercises and capability maturity assessments•Design, deploy & standardise to drive efficiency and effectiveness – develop suitable processes for the organisation, not all organisations need to have world class project management capabilities•Master the people aspect of change – design specific strategies to enable early adoption and create ownership within the project management community, consider your communications strategy, organisational design, job or role definition, compensation or remuneration, training curriculum, coordination and delivery•For a medium-sized organisation, this process can take 12-18 months to complete.