Immaturity I Maturity Excellence

FIGURE 9-12. Competency models and training.

First, the cost of maintaining a full-time project manager on all projects may be prohibitive. The magnitude and risks of the project dictate whether a full-time or part-time assignment is necessary. Assigning a project manager full-time on an activity that does not require it is an overmanagement cost. Overmanagement of projects was considered an acceptable practice in the early days of project management because we had little knowledge on how to handle risk management. Today, methods for risk management exist.

Second, line managers are now sharing accountability with project managers for the successful completion of projects. Project managers are now managing at the template levels of the work breakdown structure (WBS), with the line managers accepting accountability for the work packages at the detailed WBS levels. Project managers now spend more of their time integrating work rather than planning and scheduling functional activities. With the line manager accepting more accountability, time may be available for the project manager to manage multiple projects.

Third, senior management has come to the realization that they must provide high quality training for their project managers if they are to reap the benefits of managing multiple projects. Senior managers must also change the way that they function as sponsors. There are six major areas where the corporation as a whole may have to change in order for the managing of multiple projects to succeed:

• Prioritization: If a project prioritization system is in effect, it must be used correctly such that employee credibility in the system is realized. There are downside risks to a prioritization system. The project manager, having multiple projects to manage, may favor those projects having the highest priorities. It is possible that no prioritization system at all may be the best solution. Also, not every project needs to be prioritized. Prioritization can be a time-consuming effort.

• Scope changes: Managing multiple projects is almost impossible if the sponsors/customers are allowed to make continuous scope changes. When managing multiple projects, the project manager must understand that the majority of the scope changes desired may have to be performed through enhancement projects rather than through a continuous scope change effort on the original projects. A major scope change on one project could limit the project manager's available time to service other projects. Also, continuous scope changes will almost always be accompanied by reprioritization of projects, a further detriment to the management of multiple projects.

• Capacity planning: Organizations that support the management of multiple projects generally have a tight control on resource scheduling. As a precondition, these organizations must have knowledge of capacity planning, theory of constraints, resource leveling, and resource limited planning.

• Project methodology: Methodologies for project management range from rigid policies and procedures to more informal guidelines and checklists. When managing multiple projects, the project manager must be granted some degree of freedom. This necessitates guidelines, checklists, and forms. Formal project management practices create excessive paperwork requirements, thus minimizing the opportunities to manage multiple projects. The project size is also critical.

Project initiation: Managing multiple projects has been going on for almost 40 years. One thing that we have learned is that it can work well as long as the projects are in relatively different life cycle phases. The demands on the project manager's time are different from each life cycle phase. Therefore, for the project manager to effectively balance his/her time among multiple projects, it would be best for the sponsor not to have the projects begin at exactly the same time.

• Organizational structures: If the project manager is to manage multiple projects, then it is highly unlikely that the project manager will be a technical expert in all areas of all projects. Assuming that the accountability is shared with the line managers, the organization will most likely adopt a weak matrix structure.

END-OF-PHASE REVIEW MEETINGS _

For more than 20 years, end-of-phase review meetings were simply an opportunity for executives to "rubber-stamp" the project to continue on. The meetings were used to give the executives some degree of comfort concerning project status. Only good news was presented by the project team.

Executives, from a selfish point of view, very rarely cancelled projects. The executive was better off allowing the new product to be developed, even though the executive knew full well that the product would have no buyers or would be overpriced. Once the product was developed, the executive sponsor was "off the hook." The onus now rested on the shoulders of the marketing group to find potential customers. If customers could not be found, obviously the problem was with marketing.

Today, end-of-phase review meetings take on a different dimension. First and foremost, executives are no longer afraid to cancel projects, especially if the objectives have changed, the objectives are unreachable, or if the resources could be used on other activities that have a greater likelihood of success. Executives now spend more time assessing the risks in the future rather than focusing on accomplishments in the past.

Since project managers are now becoming more business-oriented, rather than technically oriented, they are expected to present information on business risks, reassessment of the benefit-to-cost ratio, and any business decisions that could affect the ultimate objectives. Simply stated, the end-of-phase review meetings now focus more on business decisions than on technical decisions.

STRATEGIC SELECTION OF PROJECTS _

What a company wants to do is not always what it can do. The critical constraint is normally the availability and quality of the critical resources. Companies usually have an abundance of projects they would like to work on but, because of resource limitations, they have to develop a prioritization system for the selection of projects.

One commonly used selection process is the portfolio classification matrix shown in Figure 9-13. Each potential project undergoes a situational assessment for strengths, weaknesses, opportunities, and threats. The project is then ranked on the nine-square grid, based upon its potential benefits and the quality of resources needed to achieve those benefits. The characteristics of the benefits appear in Figure 9-14, and the characteristics of the resources needed are shown in Figure 9-15.

This classification technique allows for proper selection of projects, as well as providing the organization with the foundation for a capacity planning model to see how much work the organization can take on. Companies usually have little trouble figuring out where to assign the highly talented people. The model, however, provides guidance on how to make the most effective utilization of the average and below average individuals as well.

The boxes in the nine-square grid of Figure 9-13 can then be prioritized according to strategic importance, as shown in Figure 9-16. If resources are limited but funding is adequate, the boxes identified as "high priority" will be addressed first.

Situation

Assessment

Resource Quality

Strong Medium Low

Low Medium High

FIGURE 9-13. Portfolio classification matrix.

Profitability

Customer Satisfaction/Goodwill Penetrate New Markets/Future Business

Develop New Technology Technology Transfer Reputation Stabilize Work Force Utilize Unused Capacity

FIGURE 9-14. Potential benefits of a project.

The nine-square grid in Figure 9-16 can also be used to identify the quality of the project management skills needed, in addition to the quality of functional employees. This is shown in Figure 9-17. As an example, the project managers with the best overall skills will be assigned to those projects that are needed to protect the firm's current position. Each of the nine cells in Figure 9-17 can be described as follows:

• Protect position (high benefits and high quality of resources): These projects may be regarded as the survival of the firm. These projects mandate professional project management, possibly certified project managers, and the organization considers project management as a career path posi-

/

• Knowledge of Business

• Manpower

• Facilities, Equipment, Machinery

• Proprietary Knowledge

• Special Expertise

• Reputation

• Relationship with Key Stakeholders

• Project Management Skills

• Money

FIGURE 9-15. Characteristics of the resources needed to achieve a project's benefits.

Quality of Resources Needed

Quality of Resources Needed

FIGURE 9-16. Strategic importance of projects.

Project's Priority:

FIGURE 9-16. Strategic importance of projects.

tion. Continuous improvement in project management is essential to make sure that the methodology is the best it can be.

• Protect position (high benefits and medium quality of resources): Projects in this category may require a full-time project manager, but not necessarily a certified one. An enhanced project management methodol-

Line

h ig

Protect

Protect

Management

Hi

Position

Position

Project Management

Medium

Protect Position

Build Selectively

Part-Time Project Management

Team Leaders

Part-Time

Part-Time

Low

Project Management

Project Management

High Medium Low

Quality of Resources Needed

FIGURE 9-17. Strategic guide to allocating project resources.

ogy is needed with emphasis on reinforcing vulnerable areas of project management.

• Protect position (medium benefits and high quality of resources): Emphasis in these projects is on training project managers, with special attention to their leadership skills. The types of projects here are usually efforts to add customer value rather than to develop new products.

• Line management project management (high benefits and low quality of resources): These projects are usually process improvement efforts to support repetitive production. Minimum integration across functional lines is necessary, which allows line managers to function as project managers. These projects are characterized by short time frames.

• Build selectively (medium benefits and medium quality of resources): These projects are specialized, perhaps repetitive, and focus on a specific area of the business. Limited project management strengths are needed. Risk management may be needed, especially technical risk management.

• Team leaders (low benefits but high quality of resources): These are normally small, short-term R&D projects that require strong technical skills. Since minimal integration is required, scientists and technical experts will function as team leaders. Minimal knowledge of project management is needed.

• Part-time project management (medium benefits and low quality of resources): These are small capital projects that require only an introductory knowledge of project management. One project manager could end up managing multiple small projects.

• Part-time project management (low benefits and medium quality of resources): These are internal projects or very small capital projects. These projects have small budgets and perhaps a low to moderate risk.

• Part-time project management (low benefits and low quality of resources): These projects are usually planned by line managers but executed by project coordinators or project expediters.

PORTFOLIO SELECTION OF PROJECTS _

Companies that are project-driven organizations must be careful about the type and quantity of projects they work on because of the constraints on available resources. Because timing is often critical, it is not always possible to hire new employees and have them trained quickly enough, or to hire subcontractors, whose skills may well be questionable anyway.

Figure 9-18 shows a typical project portfolio.* Each circle represents a pro-

*This type of portfolio was adapted from the life cycle portfolio model used for strategic planning activities.

Quality of Resources

Strong Medium Low r

Definition

Design

Life

Cycle J Development Phases i

Implementation

Conversion

FIGURE 9-18. Basic portfolio.

ject. The location of each circle represents the quality of resources needed and the life cycle phase that the project is in. The size of the circle represents the magnitude of the achievable benefits, relative to those of other projects, and the "pie wedge" represents the percentage of the project completed thus far.

In Figure 9-18, Project A has relatively low benefits and uses medium quality of resources. Project A is in the definition phase. However, when Project A moves into the design phase, the quality of resources may change to low or high quality. Therefore, this type of chart has to be updated frequently.

Figures 9-19, 9-20, and 9-21 show three different types of portfolios. Figure 9-19 represents a high-risk project portfolio where high-quality resources are required on each project. This may be representative of a project-driven organization that has been awarded several highly profitable, large projects. This could also be a company that competes in the computer field, an industry that has short product life cycles and where product obsolescence occurs only six months downstream.

Figure 9-20 represents a conservative, profit-oriented project portfolio, say that of an organization that works mainly on low risk projects that require low-quality resources. This could be representation of project portfolio selection in a service organization, or even a manufacturing firm that has projects designed mostly for product enhancement.

Definition

Design

Conversion

Life

Cycle y Development Phases

Implementation

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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