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03-23-05Juni 2011
page 1 • view on reporting
project – programme – portfolio management – view on project – programme – portfolio management – view on reportingreporting
Project management – view on reportingProject management – view on reporting Juni 2011 page 2 • View on Reporting
Project management – view on reportingProject management – view on reporting
• What is the purpose:
– Increase success rate of -strategically- projects;
– Decrease failure rate of -strategically- projects
– Improve - visual- reporting data;
– Improve baseline information to take decision upon;
– Improve communication, also to ‘non project management’-skilled audience , i.e. top management;
– Increase effort in strategically supportive projects; define metrics for measuring progress/success/quality of balanced scorecards;
– Order (go / kill ) strategically important projects;
• Very often lack of right information to be used by stakeholders to have a clear understanding of the project status, progress , and ‘forecast’.
• Reason to take drastic, but un-rightful decisions, which can endanger outcome of organisation’s strategy;
note:
•It is not the author’s intention to be aligned with whatever existing methodology, nor framework;
•‘projects’ – in this presentation, ‘projects’ can mean projects, programme, or portfolio
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Project management – view on reportingProject management – view on reporting
Abbreviations:
PMO - project management office
• it does not matter who takes up the initiative to implement ‘View on Reporting’ in your Organisation:
– Project manager
– PMO
– (executive) Management
– Stakeholder(-s)
– Project board ( steering committee )
– Or other
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Project management – view on reportingProject management – view on reporting
• Remarkable observations (after + 20 years of professional project experiences):
– Quality of project planning is very poor.
– Project planning is a specialty!
– Reporting and PM-‘understanding’ is very poor;
– Risk management:
• less loss of effort;
• Less loss of time;
• Less loss of money;
• Less loss of missed deadlines;
• Less loss of window opportunities;
• Improve awareness of ECV of project;
– Aligning (more) all initiatives (programmes, projects):
• Compose a roadmap with all required investment data
Abbreviations:
ECV - expected commercial value
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• Improving the planning quality;
• Reducing the risks, or at least identify the potential risk for organisation’s strategy;
• Improving the resource capacity management (aligning);
• Improving the reporting (aligning);
• Improving alignment of projects & master plan;
• Aligning ‘initiatives’ / projects according the pre-set strategy, thus avoiding loss of effort , focus, money and business opportunities (window of opportunity);
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• Inform all stakeholders (e.g. operations, management, team leads, pm’s, business, PMO,…);
• Obtain better mutual understanding of ‘needs’:
– business leads the projects, IT is a service provider!;
• Planning:
– approach & policy;
– naming conventions, other;
– capacity (specialised staff)
– quality;
– tool;
• Project process flow
– use of PM-tool, or ‘manual’- processes?;
• Information / instructions:
– written instructions, information, education;
• And lots of “Good-willing”.
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Project management – view on reporting Project management – view on reporting
• Reports , on progress, risks, resources (next skills);
• Updated project planning;
• Alignment of programmes / projects;
• Alignment of planning approach:
– Planning policy,
– Avoid typical errors of planning;
• Alignment of reports, EVA (earned value analysis), finance;
• Improvement of Business & ICT project performances.
• Aligning all kind of efforts , to enable the strategy , market position;
– Harvesting all initiatives, projects
– Based on business case , (financials, and strategic fit/match, ROI , ‘what if we not?”-assessment (reference to balanced scorecard ‘product selection’);
– Compose order of importance (necessity of good outcome per project
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Project management – view on reporting : SET UP Project management – view on reporting : SET UP BSC BSC
•Measuring is knowing;•Define what information is required to be able to assess your project on ‘total project quality management’?;•A ‘best’ tool is Balanced Scorecards (Kaplan/Norton);
•Good defined BSC allows a in-depth view on the projects, thus:•Increasing organisation’s benefits of outcome of project (application);•Increasing lessons learned for other project initiatives; your organisation will improve project-ability behaviours;•Decreasing failure rates of projects, and consequently , negative impact on organisation’s strategy;
Reference to ‘Project Management Dynamics” @ SLIDESHARE.net
Abbreviations:
BSC - Balanced Scorecards (Kaplan & Norton)
Project management – view on reportingProject management – view on reporting Juni 2011 page 9 • View on Reporting
view on reporting – some interesting PM criteriaview on reporting – some interesting PM criteria
• There is a lot of –valuable - information available when executing a project, but some interesting data has to be excavated, you have to know where to find it, and what to do with;
– Time:• Schedule (overall, per phase;)
• Schedule performance index [SPI]
– Finance• How are we going against budget;
• Cost performance index [CPI];
• Earned value analysis [EVA/-M];
• Return on investment [ROI];
• Net present value [NPV];
• Expected commercial value [ECV];
criteria that constantly emerge (1/2) :
Abbreviations:
SPI - schedule performance index
CPI - cost performance index
Project management – view on reportingProject management – view on reporting Juni 2011 page 10 • View on Reporting
view on reporting – some interesting PM criteriaview on reporting – some interesting PM criteria
• There is a lot of –valuable - information available when executing a project, but some interesting data has to be excavated, and you have to know where to find it;
– Resources• How much time are we spending on the project,
• How many resources we need (globally, per IT department, roles);
• Do we use the available resources;
– Scope: Is the scope [creep] in line with expectations (?)/ (!);
– Quality (total quality project management – TQPM)• Is the plan realistically built-up;
• Number of issues reported;
• Are we reviewing and fixing quality problems;
criteria that constantly emerge (2/2) :
note:
An organisation with project tradition, has advantages when building up a project minded attitude and a benchmark data-warehouse to assess the projects and improve the project’s success rate, thus organisation’s strategy outcome.
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view on reporting - TIMEview on reporting - TIME
Time: How are we going against schedule;
– Progress on schedule;
– Number of tasks late started;
– Number of tasks overdue (not closed);
– Number of open tasks;
– Metrics & status : traffic light
– Define : (these are default values)
• number : 1 – 2 : orange
• number : 2+ : red
– Explain reason:
• E.g. technology, resources, errors, training, management
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view on reporting – Finance & COSTview on reporting – Finance & COST
Cost: How are we going against budget schedule
– Earned value management (and assessment)
– Progress on schedule (€);
– Cash flow;
– ROI , pay-back time;
– ECV;
– Metrics & status : traffic light
– % : orange
– %+ : red
– Define reason to understandAbbreviations:
ECV - expected commercial value
ROI - return on investment
NPV - net present value
Project management – view on reportingProject management – view on reporting Juni 2011 page 13 • View on Reporting
Abbreviations:
SPI - schedule performance index
BCWP - budgeted cost of work performed
BCWS - budgeted cost of work scheduled
view on reporting – SCHEDULE : SPIview on reporting – SCHEDULE : SPI
variance SPI index of 1.0 or greater is on/above target and considered satisfactory
varia
nce
CP
I
delta CPI %
delta SPI %
Note:
Figure is a combined graphic, both CPI and SPI
“How is schedule against schedule”
SPI = BCWP / BCWS
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view on reporting – EVA - COST : CPIview on reporting – EVA - COST : CPI
• The CPI shows the ratio of budgeted (or baseline) costs of work performed to actual costs of work performed, up to the project status date or today's date.
variance SPI index of 1.0 or greater is on/above target and considered satisfactory
varia
nce
CP
I
delta CPI %
delta SPI %
Abbreviations:
EVA - earned value analysis
CPI - cost performance index
BCWP - budgeted cost of work performed
ACWP - actual cost of work performed
“How is cost against cost”
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view on reporting – EVA - COST & SCHEDULEview on reporting – EVA - COST & SCHEDULE
• The CSI shows the ratio of budgeted (or baseline) costs of work performed to actual costs of work performed, up to the project status date or today's date.
CSI = CPI x SPI
• Metrics & status :
CSI value should be 1
Variances:
CSI <> 1 means project is less likely to be ‘recoverable’
CPI & SPI
-15
-10
-5
0
5
10
-25 -15 -5 5 15 25
variance SPI index of 1.0 or greater is on/above target and considered satisfactory
varia
nce
CP
I
delta CPI %
delta SPI %
Abbreviations:
EVA - earned value analysis
CSI - cost schedule index
BCWP - budgeted cost of work performed
ACWP - actual cost of work performed
“How is cost against cost”
Project management – view on reportingProject management – view on reporting Juni 2011 page 16 • View on Reporting
view on reporting – budget milestones (or phases)view on reporting – budget milestones (or phases)
Every milestone (or phase) has a budget (baseline), vs actual budget (€ , man-days)
Rationale:
•quality check of budget planning;
Explanation:
•close follow up of milestone budget, planned (baseline) vs actuals
•A possible understanding why (when) project budget has deviations vs baseline
•Explanation: a prognosis of total budget spent (at completion)
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view on reporting – budget milestones (or phases)view on reporting – budget milestones (or phases)Baseline budget (€ or man-days) vs actual value (cumulated , %)
Rationale: Tracking of progress (man-days, % complete, €, and other) vs baseline
Explanation: visual follow up, easy to understand, and to communicate;A possible understanding why project has deviations vs baseline
Explanation: using other tools, understand why project has deviations
•Explanation: based on available resources , vs assigned resources; the number of ‘man-days’ available and the number of man-days assigned , and planned. This should be done per role or function; “too many/ not enough staff (specific role) for a certain project , or certain timeframe”
•Resources management:
•When well managed, in combination of the project plans (and roadmap) an early warning system for hiring / firing staff;
•Upfront check if sufficient resources according the scheduled needs.
•Explanation: based on pipeline (projection) a clear view on expected variances on resources (function) for the next phases (in time).•Better ‘serieux’ of overall planning;•Better ratio on successful outcome of project (assigned staff) , and outcome of programme / strategy;•Better understanding of cashflow (actual fiscal year) , cash reservation (for next fiscal year);
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Rationale: An important project quality success indication is the number of met requirements.This can be: Functional requirements , tangible and intangible, operations, up-time , availability, mean time between failures, matching with technology policy, …
•Define clear user requirements•Identify , quantify , ‘name it ! ‘•List requirements;•Build metrics;•Test or assess during review meetings;•Report;•Validate the met requirements versus the requirements defined;•Prioritise the application / project outcome;•PDCA (plan-do-check-act);•Set up improvement project.
What is to be assessed during the project review meetings/process?
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Rationale: An important organisation’s quality success indication is the number of skilled / trained staff to meet the required technology skills ?This can be: Technology, skills, tangible or intangible, …
•Define clear skills requirements (technology, other skills), based on defined strategy;•Identify , quantify , ‘name it ! ‘•List requirements;•Build metrics;•Test or assess during review meetings;•Report;•Validate the met requirements versus the requirements defined;•Prioritise the training initiatives (or hire the required skills);•PDCA (plan-do-check-act);•Set up improvement programme.
• Schedule: How is actual against baseline (cumulative)
• Metrics & status : indication how actuals are evolving against baseline ;
• 3 given data involved: work to be done (scheduled), # available/assigned resources, realised work by the assigned resources (actuals)= NEED TO BE BALANCED
• ‘late’ due to insufficient # of man-days ‘produced’ : development staff. • Use other diagrams to examine reason : lack of staff staff (not assigned ,
•Important to be defined in ‘project charter’ (financial feasibility).
•Calculating the ROI , based on assumptions when defining the project charter (project investments , and operational costs (maintenance, and evolving maintenance) [forecast cash flows]
Return on Investment (2011 - 2014)
0
1000000
2000000
3000000
4000000
initial 2011- Q2
2011- Q4
2012- Q2
2012- Q4
2013- Q2
2013- Q4
2014- Q2
2014- Q4
Project / Application Life Cycle
cost
& b
enef
it p
rog
no
sis
costs (assued)
benefits (assumed)
Project management – view on reportingProject management – view on reporting Juni 2011 page 35 • View on Reporting
TQPM – TQPM – Finance / ROIFinance / ROI
Rationale:
•quality check of project ROI
•Could be of importance when ‘re-assessing’ the desirability of the project outcome , by the stakeholder(-s). Stop of go decision
Return on Investment (2011 - 2014)
-1000000
0
1000000
2000000
3000000
4000000
initial 2011- Q2
2011- Q4
2012- Q2
2012- Q4
2013- Q2
2013- Q4
2014- Q2
2014- Q4
Project / Application Life Cycle
cost
& b
enef
it p
rog
no
sis
costs (assued)
benefits (assumed)
benefits (actual)
costs (actual)
Lineair (benefits (actual))
Lineair (costs (actual))
Project management – view on reportingProject management – view on reporting Juni 2011 page 36 • View on Reporting
scoreboard ranking projects according to the NPV-based productivity indexproject NPV development
costProductivity index =
NPV / development cost
Sum of development costs
decision
beta 57 5 11,4 5 hold
echo 42 5 8,4 10 hold
alpha 22 3 7,3 13 hold
foxtrot 58 10 5,8 23 drop
gamma 6 2 3 25 drop
delta 1,5 1 1,5 26 drop
Limit reached*
* : productivity index is used to rank projects until out of resources (€ 15 m) in development costs is reached.
* : value of the portfolio is NPV = € 121m from these 3 projects.
Project management – view on reportingProject management – view on reporting Juni 2011 page 38 • View on Reporting
TQPM – TQPM – Metrics: Metrics: Finance / Finance / ECV ECV – determining the expected commercial – determining the expected commercial value of a projectvalue of a project
Abbreviations:
ECV – Expected Commercial Value
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METRICS : financial - EVAMETRICS : financial - EVA
What?
• Measure of project progress;
• Forecast completion date and final cost;
• Provide schedule and budget variances:
• By integrating 3 measurements, EVA provides consistent, numerical indicator with which you can evaluate and compare projects.
Key:
• Where are we on schedule?
• Where are we on budget?
• Where are we on work accomplished?
Abbreviations:
EVA – Earned Value Analysis
Project management – view on reportingProject management – view on reporting Juni 2011 page 42 • View on Reporting
METRICS : financial - EVAMETRICS : financial - EVA
How?
• It compares the ‘planned’ amount of work with what has actually been completed, to determine if COST , SCHEDULE, and WORK ACCOMPLISHED are progressing as planned
• Work is ‘EARNED’ as it is … 100% completed
EVA gives a uniform unit of measure: € or man-days
EVA provides an ‘EARLY WARNING” for prompt corrective actions
Example:
30% time spent
30% € spent
Equals 30% work performed ?
Not necessarily !
Abbreviations:
EVA – Earned Value Analysis
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METRICS : financial - EVAMETRICS : financial - EVA
Abbreviations:
EVA – Earned Value Analysis
BCWS – budgeted cost of work performed
planned cost of the total amount of work scheduled
to be performed by milestone date
ACWP – actual cost of work performed
cost incurred to accomplish the work that has bee done to date
BCWP – budgeted cost of work performed
planned (not actual) cost to complete the work that has been done
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METRICS : financial - EVAMETRICS : financial - EVA
Some more abbreviations:
SV - Schedule Variance (BCWP – BCWS)
comparison of amount of work performed during a given period of time to what was scheduled to be performed
Negative variance means that the project is behind schedule
CV – Cost Variance (BCWP – ACWP)
comparison of the budgeted cost of work performed with actual cost
negative variance means that the project is over budget
Example:
Schedule Variance = BCWP – BCWS
Cost Variance = BCWP - ACWP
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A quality check for a realistic schedule. For example a project schedule with this curve is doomed to fail. The number of mandays is equal for both schedules.
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Project management – view on reportingProject management – view on reporting Juni 2011 page 47 • View on Reporting
Total Quality Project Management : average costs of project team members , Total Quality Project Management : average costs of project team members , evolutiveevolutive
Rationale:
cost improvement
Explanation
Follow up of contract costs of IT staff, and potentially re-negociate contracts;
In case of increasing contract costs, it could have impact on project budget;
This chart will help to show and understand the evolution of average hiring costs of IT staff.
Purpose:
•Follow up of average costs of IT profiles;
•Influence contract negotiations of –external- IT staff ;
•Control of budget.Totaal
840
850
860
870
880
890
900
910
707 708 709 710 711 712 801 802 803 804
Astitel
Totaal
Average day rate (€) per month.
Project management – view on reportingProject management – view on reporting Juni 2011 page 48 • View on Reporting
Total Quality Project Management : number of external project team Total Quality Project Management : number of external project team members , evolutivemembers , evolutive
Rationale:
cost improvement
Explanation
Follow up of contract costs of IT staff, and potentially re-negociate contracts;
In case of increasing contract costs, it could have impact on project budget;
This chart will help to show and understand the evolution of number of external staff, the hiring costs of IT staff. And more important , it could help to optimising resources, when done on programme/portfolio level: future needs of external staff
Purpose:
•Follow up of number of external project staff;
•Influence contract negotiations of –external- IT staff ;
•Optimising of available staff
internal versus external project staff
0
5
10
15
baseline apr/11 jun/11 aug/11 okt/11 dec/11
Project Life Cycle
# p
roje
ct
sta
ff
internal staff (#)
external staff (#)
Project management – view on reportingProject management – view on reporting Juni 2011 page 49 • View on Reporting
Total Quality IT / asset Management : TCO of applications, infrastructure, and Total Quality IT / asset Management : TCO of applications, infrastructure, and maintenance related costs (existing IT-infrastructure)maintenance related costs (existing IT-infrastructure)
Rationale:
knowing when to make a technology switch (‘warning’)
Explanation
Assessing the existing technology applied in IT infrastructure (hardware and software);
List the known expenses for each of the configuration item;
Controlling the total cost of ownership of each configuration item;
Knowing at the right moment when to switch to other technology;
Plan(-ned) investment: less unlucky surprises;
Add to roadmap: know what resources will be needed (fiscal year, staffing, priority);
Purpose:
•Management decisions
•Optimising of portfolio, and asset management.
•Strategic IT management
•TCO (total cost of ownership)
•Technology follow up (don’t stay behind the competition)
Not entirely in scope of this presentation , but….
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