The Business of Projects
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The document discusses the importance of effective project management, emphasizing the need for comprehensive planning and the role of key performance indicators (KPIs) in measuring success. It outlines the project lifecycle, highlights pipeline management, and introduces earned value management (EVM) as a methodology for assessing project performance. Additionally, it advocates for the establishment of a Project Management Office (PMO) to enhance governance and execution practices within organizations.
The Business of Projects
- 1. © Unanet The Business of Projects Failure to Plan is Planning to Fail Speaker: Kim Koster Project Management Evangelist
- 2. © Unanet Project Reality 0 20 40 60 80 100 120 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 %Complete Time Line Plan Reality 4) Result - late and over budget project 1 – It all starts with a plan 2 – A surprise occurs 3 – Recovery Impossible
- 3. © Unanet Poll 1 What percentage of your projects enterprise wide are on budget/cost? a) 0-25% b) 26-50% c) 51-75% d) 76-100%
- 4. © Unanet The Project Lifecycle Make the Project Lifecycle Come Alive! With an Integrated Tool Set! This graphic is the representation of data and processes for projects and all stakeholders from PMs to Exec’s.
- 5. © Unanet Pipeline Health and its Contribution The pipeline should be achievable (but not TOO achievable), measurable, tactical in the near term, and strategic in the long range.
- 6. © Unanet Are You Managing Your Pipeline? If not, why not?
- 7. © Unanet The Importance of Pipeline • Pipeline is the foundation of the both the near-term (AOP) and the long-range (LRP) plans • It’s the basis for both the revenue forecast and resource requirements plan • Revenue forecasts predict future financial health • Resource requirements provide the roadmap to successful project execution • Forecasting is mostly science, a little bit of an art, and requires a tiny bit of black magic
- 8. © Unanet Model Scenarios for Best Fit Model Scenarios for Best Fit – What-Iffing
- 9. © Unanet Need a Pipeline Management Tool? Make sure the tool has: • Real-time integration with the ERP system • CRM for interaction tracking and contact categorization for reference • Workflow for action items and opportunity tracking by phase • Accessible reporting, dashboards, and metrics • Demand planning for employees and TBD resources • Flexible Pwin assignment • Easy transition from proposal to an executable project
- 10. © Unanet Pipeline by Stage - Snapshot
- 11. © Unanet Proposals – the First Project Plan Still part of the pipeline but now subject to more focused tracking and management – Pwin and other factoring now in play. Start looking at your resource skills needed – Clearance needed?
- 12. © Unanet It all Starts with a GREAT Proposal Steps for completing the proposal estimate: ▪ Understand the scope. Scope comprehension is the key to accurate estimating ▪ Utilize the project template to clone or populate the project information, the past estimates, and the timelines for the tasks ▪ Establish a work breakdown structure (WBS) ▪ Estimate the resources needed to complete the work ▪ Understand the timing of needed resources ▪ Include all materials, services, and travel required ▪ Time phase the estimates ▪ Ensure that the right skill set is available when you need them ▪ Use To Be Determined (TBDs) if the name of the resource is not yet available ▪ Gain buy-in from the proposal team and the functional departments before submission to the customer At contract award, the proposal is the starting point for the project plans!
- 13. © Unanet Poll 2 What percentage of your projects enterprise wide are on schedule? a) 0-25% b) 26-50% c) 51-75% d) 76-100%
- 14. © Unanet Turning the Proposal into Action You won! Now you have to get the project started and in the system! Contracts to CASH – It is King
- 15. © Unanet Initiating the Project The initiation phase establishes the basic platform for a successful project. To be an executable project, the ERP captures from the proposal the business requirements, the high-level budget, a set of tasks and a preliminary resource plan. Considering the size and complexity of the project, the project manager develops a project team to help manage the project. Unanet enables 1-Click Proposal to Project
- 16. © Unanet What is a PMO? “The Project Management Institute (PMI) Program Management Office Community of Practice describes the PMO as a strategic driver for organizational excellence, which seeks to enhance the practices of execution management, organizational governance, and strategic change leadership.”
- 17. © Unanet Why Have A PMO? SOURCE: PMI’S 2017 PULSE OF THE PROFESSION®
- 18. © Unanet Purpose of the PMO Vision - Help project teams manage and execute their projects successfully! ▪ Update and Maintain policies for all project – tailorable to project size and complexity ▪ Resource management ▪ KPIs for the enterprise as well as projects and programs ▪ Consistent reporting across all projects ▪ Managing Change ▪ Role based training of policies, procedures, and tools ▪ Align with the corporate goals and strategies
- 19. © Unanet Adding the Detail & the Specifics Real world begins with demands and constraints on project execution. The Plan is now a living and breathing guide to progress.
- 20. © Unanet Why is Budgeting/Forecasting So Hard? Influencers
- 21. © Unanet Create a Cost Plan (Budget) Characteristics of a good budget: 1. All scope is included 2. Time-phased 3. Meets the contract cost and schedule 4. Includes all the resources needed 5. Aligns with the WBS 6. Basis for comparison to actuals and EV https://www.unanet.com/blog/8-tips-budgeting-project-based-organizations
- 22. © Unanet Poll 3 How would you rate your resource management maturity? a) Very Mature b) Somewhat Mature c) Somewhat Immature d) Very Immature
- 23. © Unanet The Feedback Loop The one thing that we can count on in this World is CHANGE! PMs need real-time information to know where they are!
- 24. © Unanet EVM For Project Success • EVM encourages detailed realistic plans to be used from the start of a project. • EVM requires disciplined and integrated planning that will help achieve early detection of issues to course correct. • Provides a common set of guidelines for measuring technical, schedule, and cost performance throughout the life of a project. • EV provides objective indicators as to performance during the life of a project. • EVM implementation can be tailored based on complexity of the project. • EVM and project management aims to have an achievable program plan. • EV provides an accurate forecast (EAC) of the total funds required for project completion. • EVM provides metrics based on actual performance data. • Provides a signal in time for the project manager to take corrective action.
- 25. © Unanet Benefits of EVM • All project sizes will benefit • Measure accomplishments • Accurately forecast project completion and final cost • Early warning to delays or overruns • Provide schedule and cost variances • Minimize scope creep that can result in overruns • Improve the control of project performance • Provides a competitive advantage and delights customers
- 26. © Unanet 1 2 3 Tasks “earn” value as work is completed. Earned Value (EV) can then be compared to actuals and budget for current status and to predict the future. Progress is measured in dollars and hours, so schedule and cost performance can be analyzed in the same units. EVM is the Answer Earned Value Management (EVM) is a project management methodology that combines schedule and cost performance to answer the question, “What work was done for the money spent?”
- 27. © Unanet The Big 3 – Common for All Types of Projects Cost Scope – What is the product (Goods or Services)? Schedule – When will the products be delivered? Cost – How much will it cost to deliver the product? EVM provides a structured process to manage all 3!
- 28. © Unanet Earned Value - %Complete and Estimated VAC
- 29. © Unanet Organize the Work Define Control Accounts Plan Resources Scope Comprehension Establish an Org Structure Schedule Tasks Establish a Baseline (cost and schedule) EVM Roadmap It all starts with a great proposal
- 30. © Unanet Poll 4 How would you rate your project management maturity? a) Very Mature b) Somewhat Mature c) Somewhat Immature d) Very Immature
- 31. © Unanet Feedback at a High Level The company level reporting, tracking, and measurements are OUTPUTS from the planning, initiation and execution process.
- 32. © Unanet Accounting for the Project Time Expense Purchasing Billings Revenue Rec
- 33. © Unanet Accounting Needs… A project based ERP GL: o Tightly integrated with the project, eliminating errors and reconciliation o Multi-version budgeting o Bank account reconciliation A project based ERP AR: o Tightly integrated with powerful billing capabilities o Unparalleled traceability into all transactions o Customer payment application and deposit o Automated receipts discount calculations based on invoice terms o Small balance write-offs o Can provide visibility to the project manager of customer or projects AR; this can be invaluable where the PM is responsible for managing the customer relationship A project based ERP AP: o Tight integration with projects o Recurring vendor invoices and purchasing requests/orders o Period-sensitive AP aging and bank account reconciliation reports o Flexible automated system check payment selection and check printing process o 1099 support o Journal entry supports automatic recurring and reversing entries, document voiding, role based posting authorization, and attachments
- 34. © Unanet Net Margin by Project
- 35. © Unanet Across the Organization Continuous and Real-Time All project stakeholders (direct, indirect, and execs) get the information they need!
- 36. © Unanet KPI’s To Measure Success Factors A Key Performance Indicator is a measurable value that demonstrates how effectively an organization is achieving key business objectives at all levels of the business.
- 37. © Unanet Defining KPIs for Your Organization • Desired outcome? • Does the outcome matter to the organization? • Methodology to measure progress? • Who can influence the outcome? • Who is responsible for the business outcome? • How will you know you’ve achieved your outcome? • How often will you review progress towards the outcome?
- 38. © Unanet Additional Tips for Picking the Right KPIs • Very clear purpose (what matters most) • Common business language • Align with your current processes if possible • Holistic approach (think through the unintended consequences) • Drive the desired behavior (Encourage and reward) • Define tolerances (red, yellow, green, blue) • Have a mechanism to display the KPIs to all stakeholders (dashboards) I – Important P – Potential Improvement A – Authority IPA Rule
- 39. © Unanet Define the KPIs That Help Drive Your Strategy Project Enterprise/Portfolio - On Schedule and Budget - Compounded Annual Growth (CAGR) - Profitability - Profitability - Revenue - Revenue - Labor Utilization - Booking - Skillset Usage - Backlog - Spend Variance - Bid to Win - % Spent - Pipeline Snapshot - Estimate to Complete (ETC) - Annual Billable Utilization - Cost per Person - Rate Analysis - Bill rate - Targets by Region, Customer, Portfolio, etc.
- 40. © Unanet EV Metrics – help manage current status and gives you a window into the future!
- 41. © Unanet 5 Trends for Project Management in 2019 1 2 3 4 5 Establish success driven Key Performance Indicators (KPIs) Increasing importance of a Project Management Office (PMO) Create a resource management practice Collaboration for success Growing investment in project managers
- 42. © Unanet Contact Us Kim Koster Director, Unanet kkoster@unanet.com