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Program and Complex Project Management - Free

Program and Complex Project Management - Free

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Published by Simon
The slide-set for a training course covering the Management of Programs and Complex Projects.Covers 42 chapters: Change aims at a new Business as Usual, Sponsor's focus, Funding (& resourcing), Coping with Threat & Opportunity, Constraints & Assumptions, Vision & Investment, The will to change, Strategic risk, Planning horizons, Project & Program defined, Roles & Responsibilities, Approach & Structure, Procurement, Planning techniques, Complexity, Governance-Delegation & Escalation, Systems and projects, Communications in Complex projects, Measuring complexity, Control of change, Status and steering, Tracking & Reporting, Steering committees, Measurement-analysis & Correction, Where Are we (CV/SV) and where will we be (EAC), Learning from experience. This is solidly "doing it for real" and nothing to do with exam preparation. Written for instructor led delivery over 5 busy days. Assumes comprehensive (PMP Level) appreciation of social dynamics of projects, use of workshops and breakdown structures, critical path analysis, probabilistic estimating, earned value and more. See our project management courses (also free on scribd) for exhaustive coverage of these topics

The free version is available to individuals persuing self-development but can only be read via scribd. A version with nominal charge is identical and can be downloaded in pdf format. It is NOT licensed for commercial use but licensing is available by contacting scribd@logicalmodel.net
An animated, narrated version with quizzes and exercises will be on mindflash.com before long.
Of course we can offer it as an instructor led event too :-)
The slide-set for a training course covering the Management of Programs and Complex Projects.Covers 42 chapters: Change aims at a new Business as Usual, Sponsor's focus, Funding (& resourcing), Coping with Threat & Opportunity, Constraints & Assumptions, Vision & Investment, The will to change, Strategic risk, Planning horizons, Project & Program defined, Roles & Responsibilities, Approach & Structure, Procurement, Planning techniques, Complexity, Governance-Delegation & Escalation, Systems and projects, Communications in Complex projects, Measuring complexity, Control of change, Status and steering, Tracking & Reporting, Steering committees, Measurement-analysis & Correction, Where Are we (CV/SV) and where will we be (EAC), Learning from experience. This is solidly "doing it for real" and nothing to do with exam preparation. Written for instructor led delivery over 5 busy days. Assumes comprehensive (PMP Level) appreciation of social dynamics of projects, use of workshops and breakdown structures, critical path analysis, probabilistic estimating, earned value and more. See our project management courses (also free on scribd) for exhaustive coverage of these topics

The free version is available to individuals persuing self-development but can only be read via scribd. A version with nominal charge is identical and can be downloaded in pdf format. It is NOT licensed for commercial use but licensing is available by contacting scribd@logicalmodel.net
An animated, narrated version with quizzes and exercises will be on mindflash.com before long.
Of course we can offer it as an instructor led event too :-)

More info:

Published by: Simon on Aug 02, 2012
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05/10/2013

In the beginning was THE PLAN. And then came The Assumptions.

And The Plan was without substance. And The Assumptions were without form. And darkness was upon the face of the Workers. And they spoke among themselves, saying, 'It is a crock of s--t, it stinks.' And the workers went unto their Supervisors, and said, 'It is a pail of dung, and none may abide the odour thereof.' And the Supervisors went unto their Managers, saying 'It is a container of excrement, and it is very strong, such that none may abide it.' And the Managers went unto their Directors, saying, 'It is a vessel of fertiliser, and none may abide its strength.' And the Directors spoke among themselves saying one to another, 'It contains that which aids plant growth, and it is very strong.' And the Directors went to the Vice-Presidents, saying unto them, 'It promotes growth, and it is very powerful.' And the Vice-Presidents went to the President, saying unto him, 'This new plan will actively promote the growth and vigour of the company, with powerful effects.' And the President looked upon The Plan, and saw that it was good. And The Plan became policy. And that is how S--t happens.

Slip: Being first at the bar Float: Remaining Beer kitty Milestone: Paul buys a round

Results are promising : Turned power on and no smoke detected -- this time... Elements will be phased in Good, gradually as but…perhaps a the software little more matures: detail here ? It's late!

Simon Harris, PMP, CGEIT, IPMA-D, P2

Logical Model Ltd ©2010

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cts e roj lls x P Ski ple m Co and es ect mm Proj s gra r ie Se Pro

Essentially complete: It's half done. We predict... : We hope to God! Serious but not insurmountable problems. : It'll take a miracle... Basic agreement has been reached. : The @##$%%'s won't even talk to us.

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n ve Se .: i ew ar e ei r n rev ho at th bee to w e t l e t e n av j ec t ce f or p e op m pe bs h pr o e. : jo sk e o tim Ta inc ular to th this reg ned at en ed ev it. loa ut fin 's d e d y bo ee ell obo t a :S t w N u gh h e t s . r . No tho ing t men swe ow t lys ire an : N t na requ ious od. ugh wan ll a v t o ho ' t Sti pre ders 've t don un we , we ut it ell at it o t w t h ou t k a b No ab thin re. to ymo an

Free Version
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This is a complete training course in our project skills series! And for FREE if used for personal, individual development!! – No catches everything needed is within this file If you want to use this intellectual property as a commercial offering that’s fine too as long as you cut me in  I don’t want much !! – Pre-arranged commercial use removes this notice, gives you animated slides that build procedures step-by-step, also step-by-step exercise files, instructor notes, suggested time-line for delivery and support
– For non pre-arranged commercial use (IE where you charge a fee) I hereby offer you a contract to use this materials, without prior notice in a commercial context at £1,000 per day or per copy which ever is the greater (that’s an ‘offer’ and notice of ‘consideration’, use will constitute ‘acceptance’ and forms contract) – as soon as I become aware of use I will start proceedings to collect fees due If in doubt – Ask 

– If you are in a commercial context (you paid something) and are reading this then I didn’t get a cut. Let me know and I’ll split what I recover with you
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By Simon Harris, PMP, CGEIT, IPMA-D & PRINCE2® reg’d

Programmes and Complex Projects

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They who think education is expensive have not yet assessed what they pay for ignorance

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Domestics
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Cheese
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• • • • • • • • • • • • •

I had to do something to earn my current Cheese Having Cheese makes me happy The more important that my Cheese is to me the more I want to hold on to it Change happens: the faceless “they” will (re)move your old Cheese Noticing small changes in my Cheese helps me anticipate change in advance & adapt to big changes when they arrive Smell the Cheese often to check for small changes The world changes, my Cheese is moved: If I do not change I will become extinct I did things last week. I had Cheese last week. If I do things differently next week I may not have Cheese Thinking about not having Cheese makes me afraid Being afraid stops me doing things differently I have to ask myself “What would I do if I were not afraid” When I stop feeling afraid I start feeling good Imagining myself enjoying New Cheese is the first step leading me to it
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Inspired by “Who Moved My Cheese” by Dr Spenser Johnson an excellent 45 minute read

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Cheese
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• • • • •

Movement in a new direction helps me find New Cheese The sooner I let go of stale old Cheese the sooner I find New Cheese It is safer to search for New Cheese than remain in a Cheese-less state Old beliefs do not lead to New Cheese Beliefs only change when we believe that there is New Cheese to be discovered and enjoyed

The new ideas in this or any course need conscious effort to be understood
– Worse!, it takes much more effort to put them into use
• Examine your Old Cheese for mould ((problems with current working) • Imagine your self enjoying your New Cheese (benefits of new practices)

– Consider the steps to move from one comfort zone to a new one
• Who needs to be involved, What actions, When & What is in it for them

– Share your insights & FUD (fear uncertainty and doubt) in class
• Discussing implementation challenges helps you prepare for action • Gives comfort knowing others have been & are succeeding (and helps networking)
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Promise yourself 1 action now, with a date. On your return to the office plan your intended 6 achievements with a milestone each Friday till done

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Who Are We All?
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Name, Role and Organisation: Telling others about yourself

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Change Manager’s* Assessment Card
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Performance Factors Far Exceeds Requirements Exceeds Requirements Meets Requirements Needs some Improvement Does not meet Requirements

Quality

Timeliness

Communication

Initiative

Adaptability

Leaps tall buildings with a single bound Needs a running start to leap tall buildings Can only leap small buildings Crashes into buildings Cannot recognise buildings

Is faster than a bullet Is as fast as a bullet Not quite as fast as a bullet Is as fast as a slow bullet Wounds self with gun
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Talks with God Talks with Angels Talks to self Argues with self Loses those arguments

Is stronger than a locomotive Is stronger than a bull elephant Is stronger than a bull Shoots the bull Smells like a bull

Walks on water consistently Walks on water in emergencies Washes with water Drinks water

Passes water in emergencies

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*Change management is a generic term for both Project management and Programme management 8

My Assumption
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• • •

A typical reader of these materials should have • Real-world experience of projects (Not necessarily as project manager) For advanced classes it is useful if readers are qualified at PMP, IPMA-D or -C or PRINCE2® Registered practitioner or equivalent level Basic level courses assume no back-ground • Advanced courses assume that you know why and how to use techniques such as work-shops and tools such as white-boards and Product Breakdown Structure (PBS) and WBS outside a classroom, that you know what the critical path is, how to use float as a type of ‘resource’ & appreciate the need for ‘levelling’
• • If you are unsure of how (and why) use the tools noted above then a free course covering those skills are available at www.logicalmodel.net. You need it before advanced ones If you would like a quick overview of just why to use these tools in reality then my white papers on the use of PBS/ WBS, ‘Doing risk’, Post-It™ planning and more can be found by search ‘simon harris’ on the web-sites of the American Society for The Advancement of Project Management and PM Today
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PRINCE2® is a trademark of the OGC in the UK and other countries and they demand their recognition with this note on everything – bureaucracy!

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Style
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3 Types of Slide – The core message: Places where we dwell
• Focus of what we need to cover to complete the course

– Sign-post, objectives and summaries: Navigational elements to give context – Reference, detail and expansion: Places we may flash-past (up to you to say if you wish to dwell longer)
• Support what we are covering

2 Types of session (mostly alternate) – Input: explanation of tools and techniques
• 90% me, Please interrupt and ask questions as soon and whenever you need to

– Use: exploration of meaning
• Best if it is 90% you, debate and argue application, interpretation, variation

1 Conversation: All contribute and give each other space
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Path To Success
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• • •

Projects & Programmes are vehicles of change – Understanding we start & end with the Business Impact of desired change Plans must match reality – Creating project and programme plans that track moving & uncertain targets Planning, design, creativity & spontaneity – Defining and using complexity to achieve desired change – Governance structures appropriate to the risks and politics Control structures for programme & project monitoring – Steering: plan plus status = decisions – Learning: transforming course attendance into Business Impact

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12

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• •

Projects run successfully when they use controls effectively Our controls include your feedback – I try hard not to offend, bamboozle or bore you. If you have feedback at any time please advise me in what ever way is comfortable for you so I can act
• EG: Comment, in person in class/ at a break/ at the end of day or • Add a note to one of the Ground-Rules flip-charts or • Blu-tac a note or stick a Post-it to the back of the training room door

While comments on the end of event form are always welcomed and acted upon they are too late to make the event better for you – If I don’t know its unlikely I will fix it, If I do know I can at least try – Eg Course pace, topic depth, time given each topic, heating/ lighting, Exercises & debrief, Anecdotes & jokes, Catering or parking, Course notes and pens, etc etc etc without limit

Notes: • • •
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Chapter Notes & Actions to Implement 12

The Course’s Purpose
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This course attempts to set-out the tools, techniques, tips, traps and principales needed when leading complex projects and programmes.

– It also covers basic project management tools from the ‘you may need a refresher’ perspective
• Many ‘senior practitioners’ omit the use of the basic tools which makes the job harder than it has to be and invites stress or failure at more complex levels • My mistakes: seeing everyone’s perspective and thus realising what isn’t obvious to others (or seeing what, with some distance is obviously an error) is impossible. IE this contains errors, flaws & weaknesses: tell me via Cplx@LogicalModel.Net and I’ll fix them The course was written to be instructor led (more details later). Hopefully it is of value as self-study Please pass a copy or a link on to those you think would find it useful - thanks

• •

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• Some of my thoughts as expressed in this work were refined in discussions I have had while on assignment for Atlantic Management Centre International (AMCI) Ltd. I thank them for agreeing that, where representation of ideas have merged and been shared, AMCI is content this acknowledgement discharges any obligation to them.

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Introductions & Logistics Change is Aimed at Business As Usual Sponsor’s Focus Funding The Programme (it isn’t just money) Coping with Threat While Seeking Opportunity Constraints, Limits And Assumptions Pursuit of Opportunity, Vision & Investment Creating The Will To Accept Change Business Case is Strategic Risk Strategic Alignment Planning Horizons Project And Programme Defined Roles & Responsibilities Deciding The Approach & Structure Procurement Of Goods And Services Techniques For Planning Life-cycles, Stage Gates And Governance Through Approvals Project Control And Technical Development Cycles Planning at Programme Level End Point, Quality is Scope is Quality is… Activities at Handover (Technical & Business)
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Route-Map: Programmes and Complex Projects
22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. Programme Deliveries Caring For People & Process When Closing Down Initiatives Stakeholder Management From Goal To Deliverables From Deliverables To Activities From Activities To Critical Path From Critical Path To Resourced Schedule Estimating Probabilistic Schedules Complexity Complexity: Systems And Projects Communications in The Complex Project Measuring Complexity Control Of Change Governance Is Plan + Status = Steering Decision Current Plan As Selected Route Across The Landscape Tracking And Reporting Progress Steering Committees Measurement Analysis And Correction Where Are We, Where Will We Be? Learning From Experience

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Change is Aimed at Business As Usual

• Target in two senses: 1) Current BAU is ‘hit’ and 2) We have a ‘hit’ when the new BAU emerges

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Next: Change is Aimed at Business As Usual
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1. Learning From Experience 2. Arriving at “Business As Usual” 3. Corporate Development Model 4. Improving the Organisation’s Ability 5. Project Management 6. Improving The Individual’s Capability

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Learning From Experience
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• •

Everything is circular – This is out last chapter, but LfE is only of value when done first Four aspects: 1. Tell me how to ride a bicycle
• r~v2/a • To compensate for a given angle of imbalance (a), we must take a curve, radius (r), on the side of the imbalance, proportional to the square of the velocity (v) over the imbalance

2. Experience (Do)  Reflection (Observe)  Synthasise (Hypothesis)  Experiment (Do) 3. I know tacitly  I make explicit  you know explicitly  you know tacitly 4. Unconsciously incompetent  Consciously incompetent  Consciously competent Unconsciously competent
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Arriving at “Business As Usual”
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Benefits streams and benefits harvesting are the results of change management* – Pursuit of benefits often triggered by someone learning from experience – How will you change as a result of being here? Benefits are in BAU Projects only enable a new usual Programmes group projects to achieve new business – Business is a collection of people and processes

• • •

Why change?

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*Change management is a generic term for both Project management and Programme management 19

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Corporate Development Model
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Probability

Decisions made on sound basis & Decisions made on sound basis & even in anticipation of affects even in anticipation of affects across all work areas across all work areas

Increasing Maturity Increasing Maturity

Level 2-5
Estimate
Probability

Cost, Time

Improved Performance Improved Performance

Estimates match reality & Estimates match reality & are therefore usable are therefore usable
Cost, Time

Level 1
Estimate
Probability

Plans reflect reality Plans reflect reality

Reality does not Reality does not match estimates match estimates

Level 0
Estimate
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Cost, Time

Mismatch between Mismatch between plans & reality plans & reality

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Improving the Organisation’s Ability
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• •

Organisation’s ability to improve comes from shared history QMS defines standard work instructions & procedures – Standard tasks = standard durations = standard costs & resources – Basis for evolutionary, gradual, consistent improvement Standard break-down structures define products, phases, responsibilities – Distribution curves are higher & narrower (less variation) – Natural basis for training & competency development – Provides architecture for recording estimates and actuals – Standards in the QMS and xBSs in the PMO form the basis of an experience database All adds up to “competitive advantage”

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Project Management
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• • •

PMI, PMBOK, PMP accreditation APM, APMBOK & Pathways – Suite of qualifications PRINCE – OGC (public domain) ownership – APMG administered registration of qualified practitioners ISEB & other (eg NVQ) Major consultancies/ corporate internal methods Governance, policy & delegated authorities – Roles & responsibilities
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• • •

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Improving The Individual’s Capability
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Allow time to ‘do it right’ is quicker in the long run – ‘Start now’ is only best when proceeding in the correct direction
• May be justified when the ‘fire-alarm’ is sounding

– Change management tool-bag is big, takes time to learn content – Not every tool on every occasion • Establish (non-financial) rewards for good work [and consequences for bad?] – Recognition – Choice pieces of work – The economy punishes the company for poor performance
• Should there be personal consequences for poor performance?

Management skills require explanation, coaching, learning – Cascade what you know up and down through the teams
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Focus shapes responsibilities in execution of change

Sponsor’s Focus

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Next: Sponsor’s Focus
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1. Context 2. Benefits are Uncertain 3. Risk Seeking V. Risk Avoiding 4. Drivers for Business Stakeholders 5. Benefits Management 6. How? 7. Source of Benefits 8. Expressing Benefits 9. Benefits How: What When

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Context Business Context
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Company Context

Shareholder

Strategy Determination

Functional Mgmt
idea outcome

Competition
risk Change Initiative opportunity

Regulators
investment
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benefit

Customer

26

Benefits are Uncertain
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• •

Any source of opportunity accompanied by threat – What is certainty Risks have a probability – outcomes of interest possible outcomes Uncertainty – Outcome set is unknown (unknowable) and/ or probabilities are unknown – Assessment of uncertainty is “speculative” Projects & programmes deal in uncertainty

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27

Risk Seeking V. Risk Avoiding
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Would you rather have a Sure-Thing or (P% chance of Gain and 100-P% chance of Loss) When chasing targets we tend to be risk seeking when protecting the status quo we tend to be risk averse – Senior people & people in blame cultures tend to be ‘protectors’ of the status quo!!!
Ambivalent between the 2 choices

Risk Appetite

Averse

Seeking Size of Risk

Take the sure thing worth 100

Take the Value at Risk potential to be 200 but may be 0

Probability % Factored Value Averse Choice Slight Averse

10.00% 20 Take the ST

20.00% 40 Sure ST ST ST The

30.00% 60 Thing ST ST © Logical Model Ltd ST V@R

40.00% 80 ST ST ST

50.00% 100 ST ST

60.00% 120 ST ST V@R

70.00% 140 ST

80.00% 160 ST V@R

90.00% 180 ST V@R V@R V@R V@R

Neutral Ltd  +44 ST © Logical Model Choice (0) 845 2 57 57 07 Slight Seeking Seeking Choice ST Take

V@R V@R V@R

V@R V@R V@R

V@R V@R V@R

V@R V@R

28

Drivers for Business Stakeholders
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Costs

Product Revenues

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Benefits Management
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Coherent structure to – Develop, deliver and bring into use (create outcomes from) the products delivered from projects Projects produce deliverables: Businesses need outcomes – Programme management often encompasses benefits Benefits come from the changes in business conduct – Programme often vehicle to achieve change and benefits Benefits Management is always a business accountability – Accountability cannot be pass-on – Activities can be outsourced or delegated Outcome of change seen as positive by (major) stakeholders

• • •

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30

How?
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Actions to gain benefits are – Job descriptions: Management change staff roles & responsibilities – Culture: Management change behaviours & attitudes – Systems: Management change process and skills – Infrastructure: Project or Programme deliverables (insufficient on own) Post Project Review Plan must identify – Who is accountable – a named individual – Who sees it – a named individual – When do they see it – a meeting, report or other tangible item – How do they recognise it – scale and value – On what date can they expect it – explicit date – (Scale, value, date may be a series of targets for evolving capability)
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Source of Benefits
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There are only 3 sources of benefit:… – New revenue/capital (or utility, or satisfaction, or smiling people…) – More revenue/capital from existing sources (…bigger smiles…) – Less cost in revenues/ ROCE* (More margin, all smiles no frowns…) Financial value comes from either:… – Match to the competition: disadvantage removed – Competitive advantage gained – Information to aid decisions: better, faster, cheaper Projects create products, products have impact and value – Products impact the processes and the tasks or roles of people – New processes and tasks create benefits – Product  needed capability  operation performed  benefit stream
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* Return on Capital Employed32

Expressing Benefits
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• • •

Many Benefits Management issues are rooted in poor specification No specification of “current status” or desired end-point – Measurement must be objective, absolute and numeric* Provide vocabulary and tools to express desired benefits with clarity – Replace “improve”, “reduce”, “enable” with dated absolutes – Secure agreement between all parties – Remove subjectivity – Incentives those involved Expressing utility is hard, normally comparative

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everything can * Not that can bethat countscounts.be- counted33 not everything counted, Einstein

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Benefits How: What When

34

Set vision or goal Set vision or goal Plan Benefits Management Plan Benefits Management Engage business participants Engage business participants Define measures Define measures

Measure the results Measure the results

Your idea

Project bit Project bit Business bit Business bit

Project bit Business bit Business bit

Measure the status Quo Measure the status Quo Plan Realisation Plan Realisation Involve business participants Involve business participants
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Embed tracking process Embed tracking process Foster business ownership Foster business ownership

34

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Options and the politics of each source of resource

Funding The Programme (it isn’t just money)

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Next: Funding The Programme (it isn’t just money)

36

1. Funding Implications 2. Budget As Planning Constraint 3. Budgeting

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Funding Implications
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Programme funded by central money or divisional budgets – New money or diverted money: Different politics – Programme may be a cost centre in the organization
• Or a cost code in each profit centre

Project (if we are rational) – Specific amount defined after planning for scope & quality or – Amount constrained at outset that dictates scope & quality

Programme – May be as project – Often budgeted on an allowance I.e £€$m p.a. – Revenue streams & share price affect programme affordability , nding , ing u nd – Funds allocated to projects against justifications ect f o ffect fu l? r es f ccesaaf conttrol? en rren and con fe i e iion e difffecutton and h d © Logical Model Ltd  +44 (0) 845 2 57 57 07 do ttheg, ex ecu o in , ex How dann ing Howpl ann 37 pl
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Budget As Planning Constraint
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• • •

Ration what we do based on what we can afford – Money not the only (or even main) rationed resource Budget connects resources available to goals that it will be possible to achieve – Defines (constrains) accessible benefits (Goals have financial value) Operational units have cyclical patterns that may constrain product deliver window – Deliveries affect existing organisation’s capability – Ability to absorb change is the most restricting budget – Willingness is next most restricted!
ile a wh ile wh in a n More i ore M

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Budgeting
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Harder to estimate than departmental budgets – Programmes (or more precisely their projects) not neatly aligned to financial years – No year on year track record for estimating histories
• (In one sense hopefully there aren’t!)

– May be round-up of multiple projects and appropriation of funds – Often minutely scrutinised
• At allocation even if never again

Timing of expenditure often of interest – Treasury function & cash-flow forecasts – Large CapEx may be most significant outlay for the organisation – Rules for capitalising & depreciating programme spend

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Coping with Threat While Seeking Opportunity

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Next: Coping with Threat While Seeking Opportunity

41

• • • • • • • • • • • • • •

9 Steps Risk Defined Keys To Risk Management Threat & Opportunity Interaction Tools For Risk Identification Qualitative Methods Ordinal Scales A Sample Exposure Matrix Threat Assessment Matrix Risk Management Process Risk Log Contents Response Types Risk Response Hierarchy Done Right It Isn’t A Step
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9 Steps
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Iden

enc ting Co n

A ss

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A wa rene ss

ent rem Reti

Prev

ito Mon

R es

Res

ent essm

tion tifica

se pon

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s e D ev e po n

enti ve

ring

y

Co nt i n ge

Re s er v es

S elec tio

lo pm e n t

Record Keeping

n

nt

42

Risk Defined
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Definition – An event that if it occurs will cause an impact to CSFs Fundamental characteristics – Event – probability
• Can be made more or less likely to happen

H Impact

– Outcome - impact
• Positive or negative change to project cost, L schedule or scope baseline Probability • Effect can be enhanced or reduced

H

L
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43

Keys To Risk Management
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Well expressed risks “We may be late” is not enough to assist response development “There is a risk that use of rare skill S in project P results in task estimates being too low resulting in the need to recruit new staff” One event’s outcome may be the event in a new risk – “TIART being unable to recruit extra resource will be a bottleneck in delivery schedules leading to delays in dependant projects ” Event may have multiple impacts (outcomes) – “…and thus drive up the contract rate for S, and alert the competition to our actions, and miss our marketing deadlines, and …. Impact may result from multiple events

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Threat & Opportunity Interaction
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E – Event O – Outcome A - Action

A4

A6

A7

O1 / E3 E1 O2 E2 O3 A1 A2 A3 A4

O4 / E4 O5

O6
A1 A2 A3 A4 A5 A6

A1
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E1 E2 E3 E4 O1 … O6

+ + + --

-- + -

++ -

+ +

--

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45

Tools For Risk Identification
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Task lists, schedules and budgets – Work Breakdown Structures Brainstorming a key tool – Affinity analysis Lessons Learned histories and aide-memoirs Taxonomies – Checklists

• • •

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Qualitative Methods
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• •

What is a scale? When numbers are impossible, too expensive, too slow – High/ Medium and Low are the best scale – How many steps 3, 5, 7 – What does “V. Unlikely” mean to me Is that what it means to you

• •

Would 12% be better? What is the difference between 78% and 92% likely? – Only different if….

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Ordinal Scales
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Use statements that describe an ordinal or incremental scale; e.g.: – 10 – 9 Government falls – 8 Make global headlines – … – 2 Causes minor inconvenience Non-linear: 6 to 7 is not proportional to 7 to 8
Project Objective Very Low .05 Cost Increase < team tolerance Low .1 Below PM Tolerance Within buffers Moderate .2 Below Project Tolerance Renegotiate resourcing High .4 Requires re-funding request Very High .8 Board level decision

Cost

Schedule < Team tolerance Scope

Any impact on benefits Overall Project Schedule case Slips >120% Impact of benefits case Benefits impact removes > 3% project from “best use of resources list” Quality impact unacceptable to client Project end item is effectively unusable

With agreed tolerances Outside tolerance only Renegotiation of when taken in aggregate baseline with-in cost/ time/ quality Quality impact barely noticeable
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Quality

Only demanding Quality impact applications are affected requires client approval

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48

A Sample Exposure Matrix
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49

Adapted From The Project Management Body Of Knowledge Chapter 11

V. Low Probability V. High High Med Low V. Low 0.900 0.700 0.500 0.300 0.100 0.050 0.045 0.035 0.025 0.015 0.005

Low 0.100 0.090 0.070 0.050 0.030 0.010

Med 0.200 0.180 0.140 0.100 0.060 0.020

High 0.400 0.360 0.280 0.200 0.120 0.040

V. High 0.800 0.720 0.560 0.400 0.240 0.080

V. High 0.800 0.720 0.560 0.400 0.240 0.080

High 0.400 0.360 0.280 0.200 0.120 0.040

Med 0.200 0.180 0.140 0.100 0.060 0.020

Low 0.100 0.090 0.070 0.050 0.030 0.010

V. Low 0.050 0.045 0.035 0.025 0.015 0.005

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Threat Assessment Matrix
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Qualitative & quantitative approaches combined

Health & Saftey Environment Reputation Long term Multiple wide-spread Deaths damage Death or Localised Injurys long term Widespread short Injury term National Outrage Local Outrage

Financial Loss

Qualitative

< 1 in 10,000 Extremely Unlikely

< 1 in 1,000 Very Unlikely Crisis High Crisis Medium

<1 in 100 <1 in 10 Unlikely Crisis High Crisis High Possible Crisis High Crisis High

> 1 in 10 Likely Crisis High Crisis High

> 100m >10m

Crisis Catastrophic Medium Crisis Crisis Low

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Time off Short term work localised Easy CleanFirst aid up Complaints

Regulatory Censure >1m Local Media & Customer impact >100k >10k

Severe

Low

Moderate High

Unaccep Very High table Very High

Moderate
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Low Very Low

Low Low

Moderate High Low

Low

Moderate High

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Risk Management Process
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Avoided Still a manageable risk Closed Select & take action

Assess current I&P

Develop response

Risk Happens Contingency or Workaround

Escalate to Higher Authority

Identify & record

Team Leader Project Manager Programme Corporate Meeting packs & Project Meetings Report Risk Status

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51

Risk Log Contents
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• Risk ID, Date, Person raising, and contact details – Current status (summary/ duplication of action log: pragmatically open/ closed) • Footprint (or scope of impact & response) – Project or projects affected by prevention, reduction, transfer of event – Projects affected by contingent or accepted work-arounds of outcome • Description of Risk Trigger or Event (Threat or Opportunity) – Event or context triggering the outcome – Timescales to trigger for actions to affect probability – Linked risk records for multiple Cause/Effect (Trigger/Outcome) pairs and secondary risk • Description of Risk Outcomes (Impact Assessment) – Timescales to impact for actions to affect impact – Impact descriptions for each of (scope, schedule, costs, quality, resourcing, reputation…) • Responses (multiple entries per risk) – Possible Event response plan, cost, residual probability & decision authority – Possible Impact response plan, cost, residual impact & decision authority • Action log – Response taken, plans revised, person taking action, person authorising action © Logical Model Ltd © Logical Model Ltd  +44 (0) 845 2 57 57 07 – Implementation state (in progress, completed/ closed, others as descriptive)

52

Response Types
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Event / Probability – Reduction (to 0 = Prevention) – Reduction to “oh well that is enough” = Acceptance – Transference
• Is it ever really transfer?

H Impact Insure Prevent

Outcome / Impact – Reduction (to 0 = Prevention) – Reduction to “oh well that is enough” = Acceptance – Transference
• Real transfer (eg Insurance)

L Prob. Contingent Accept L

H

Contingency
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53

Risk Response Hierarchy
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1. 1. 2. 2.

Physical Controls Physical Controls – Preventative measure – Preventative measure Procedural Controls Procedural Controls – Preventative measure – Preventative measure

••

Very high & above Very high & above – Multiple safeguards from all – Multiple safeguards from all classes classes High in High <1 < 1 in – Safeguards in at least100classes 10,000 1,000 – Safeguards in at <1 in 3 classes least 3 <1 in 10 Extremely Very including contingent including contingent
> 1 in 10 Likely Crisis High Crisis High Unaccep table Very High

••

3. Human oriented Health & Financial 3. Human oriented Saftey Training, roles & responsibilities, Qualitative Unlikely Unlikely Unlikely Possible – – Environment Reputation Loss Training, roles & responsibilities, •• Moderate Moderate supervision Long term supervision – Safeguards in 2 categoriesCrisis Multiple Preventative measure wide-spread National Crisis Crisis Crisis – Safeguards in 2 categories – – damage Preventative measure > 100m including contingent Deaths Outrage Catastrophic Medium High High High including contingent 4. Contingency arrangements Death or Localised Local Crisis Crisis Crisis Crisis 4. Contingency arrangements •• Low Low Injurys long Outrage Crisis Low Medium High High – Postterm containment >10m – Wide-event containment Post event – Safeguards in at least contingent – Safeguards in at least contingent classes spread short Regulatory classes Injury term Censure >1m Severe Low Moderate High Very High •• Very Low Very Low Local Media – Safeguards may not be required Time off Short term & Customer – Safeguards may not be required
localised impact Easy CleanFirst aid up Complaints work >100k Moderate Low Low Low Low Moderate High >10k Very Low Low

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Moderate High

54

Done Right It Isn’t A Step
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Threat and opportunity management IS the core of change management – Should not be regarded as separate You don’t ‘do it’ separately it is integrated into the other steps
N Watch Trigger Y Contingency in Place Y N Work-Around Contingency Actions
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N Has it past Y Close

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55

Who Are Logical Model Ltd (LML)?
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A niche consultancy that delivers training and consultancy around control and governance of project based benefits realisation – LML’s purpose is to improve the project management state of the art through popularisation of what is common-sense (which I suggest is ‘obvious after it is observed’ not necessarily ‘is widely-known’)

Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project risk and quality management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® use in the real-world & PRINCE2® Exam preparation (but only if
you insist on exams as we believe they create the wrong focus which ends-up destroying the value to a business)

– Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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56

Individual Use
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57

These materials are provided free of charge for the use of individuals studying for their own professional development – If you encounter them in a context where a reasonable person might conclude someone is using them in a money-making setting: E.g. on a training course, provided on a company network or from your boss then please email details to License@LogicalModel.Net and I will treat your information as confidential AND share any fees I manage to levy – Further support for these materials is available and is explained in subsequent chapters and summarised at the end of the slides

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57

Other Support Materials
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58

The slides in this .pdf are static but almost every slide of the PowerPoint is animated – The PowerPoint is available for a very modest fee – see website for details – www.logicalmodel.net Let me know if a narrated version would be of interest

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• •

Cascading intent and escalating mismatches Project plans meet programme constraints

Constraints, Limits And Assumptions

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59

Next: Constraints, Limits And Assumptions
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1. Stepping Into The Future 2. Vision 3. Know The Trade-offs: Better, Faster, Cheaper (Pick Two) 4. Know The Limits (And Escalations) 5. Balance: Risk Versus Rewards 6. Attitude Towards Risk 7. Asymmetry In Loss And Gain 8. Terms Of Reference: Project Contract

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Stepping Into The Future
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Conduct workshops that define the desired end-point – Use business’ own vocabulary – The means by which stakeholder (dis)agreement is reached
• Aligning all stakeholders to the same outcome

Tested by – Describes the world after the (programme, project, phase) is complete – Tells me how I will know the achievements are acceptable – Goal always accompanied by assumptions and constraints Know the limits that cannot be overstepped – Let the steering group understand the battle-grounds upon which their decision making responsibilities will be played out Simple set of mechanics – Does not mean simple to run!
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Vision Business Context
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Company Context

Shareholder Directorate

Strategy Determination Pgm Team

Functional Mgmt Operations 62 Staff Programme

Competition

Vision

Programme Constraints Planning

Regulators

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Deliverables Project Project Project Project Project Project Action

Goal

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Customer

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Know The Trade-offs: Better, Faster, Cheaper (Pick Two)

63

Constrained

Refine a product New Product Refine a product

New Product Refine a product

Controlled

Consequential
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New Product
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63

Know The Limits (And Escalations)
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In tolerance (just) Escalation Zone Tolerance Limit Baseline Current Status Start

Goal

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64

Balance: Risk Versus Rewards
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• •

Triangle’s 4th side: Risk tolerance Set-up controls matched to risk – Two sorts of risk in a project – Risk related to What & why or the outcome
• Strategic – belongs to sponsor for acceptance, response or rejection

– Risk from How – Tactical – belongs to project manager & teams • Responses to risks are part of project scope – Actions to address included in WBS, budget & schedule – Risk identification and response development is PART OF PLANNING PM’s duty to qualify and express the stakeholder’s willingness to tolerate risk and reward trade-offs – High risk projects linked to potential for high gain
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r llater iis ate s on th n th ore o More M

65

Attitude Towards Risk
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For all the science wrapped around it, in the final analysis risk is an emotional, personal, subjective topic What is “Risk Tolerance” or “Risk Appetite” Management attitude to risk is – Comfortable-with – Wary-of – Scared-by

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66

Asymmetry In Loss And Gain
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• • •

Which TV programme are we playing Scenario 1: You gain £32,000 – “You had 32,000…you’ve now got 64,000” Scenario 2: You lose £15,000 – “You had 16,000…It is the wrong answer, you’ve just lost £15,000 ” – “Oh my God” Scenario 3: You lose £32,000 – “You had 32,000…you’ve still got 32,000” – “Oh well I don’t care” Try this – “Buy your new sofa this weekend or lose our massive savings”

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Terms Of Reference: Project Contract

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Produced by the Programme or Delivery Manager (or sponsor)* – Given to the Change Manager to delegate authority – States change initiative’s outcome – Specifies authorities, tolerances and controls Can NOT be a pricing quotation – Rarely does anyone know enough to fix price & schedule at this time IS a record of imposed constraints – And the process for escalating trade-offs between constraints explored during planning Records obligations of and commitment from ALL stakeholders – Sign-off by stakeholders shows commitment to their obligations – Agreement in principal - 1st step to a schedule
• May include undated phase level plan
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*Probably by delegating the writing to the project manager 68

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No return without cooperation, No cooperation without motivation, No motivation without view of the end-point

Pursuit of Opportunity: Vision & Investment

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Next: Pursuit of Opportunity: Vision & Investment

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1. Establishing The Vision 2. Vision 3. Purpose Of Vision 4. Vision & Leadership 5. Vision 6. Vision Checklist 7. How To Establish The Vision (or Goal) 8. Meeting Conduct 9. Impacts (or Deliverables) 10. What vs. How 11. Requirements
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Establishing The Vision
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• •

Pre-requisite for programme planning Business strategy may already exist – When the vision is not available gather stakeholders for strategy sessions – Use goal setting techniques • Key component of process is to unmask disagreement – Resolving disagreements is major success factor • Vision is combination of – “Where we will be at the end” – “How will we know we have got there” – “When do we want/have to be there” – Assumptions and constraints affecting the route to the goal

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Stakeholders
Shareholder Sponsor Vision Budget Regulators PM
Need

Vision Business Context
Company Context

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Benefits Stream Pgm Team Functional Mgmt Operations 72Staff Programme

Competition

PM

PM

Deliverables Team Leaders Pre-Requisites Budget Leaders Team Team Leaders The Team The Team © Logical Model Ltd  +44 (0) 845 2 57 57 07 The Team Customer
Need Budget © Logical Model Ltd

Purpose Of Vision
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• •

Stakeholders drive the vision From the vision decide: What will the organisation’s functions be in the future I.e. How will benefits be generated Drives What systems and processes are needed I.e. Capabilities or products Drives What projects are required in what sequence and with what interdependencies Drives Budgets, resources and skills, schedules and timings

• •

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Vision & Leadership
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What is Vision? – Description of the future – How is it different from Goal? – Is short, I could read it between floors in the lift What is Strategy? – Principals and major steps (leaps?) to the future – Easily explained over lunch What is Leadership? – Excite and delight, Inspire, Trust – Do the right things What is Management? – Do things right: to plan
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? each ? each of f oses o ses rp o p he pu r e pu th re t e hat a r at a h W W

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Vision
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Is – – – – –

Clear sense of direction: What change is needed Simple, Relevant, Sensible, Uplifting, Believed In the ears, eyes and hands of all the people Communicated for understanding & gut level buy-in Motivates, touches hearts and minds, drives strategy

Is Not – Detailed, a budget or plan – Behind closed doors

AT T r WH A ssiians WH u ssans ou r e R u y is y ou OW is e vs th e Roon W d vs th HO i e M oon My H al Pr id My n al Pr he o the M o atio n an t o t N i dam t Eg N at nd a m an Eg Se n Se

• • •

Bad vision – Missing or poorly written, endless directives, uncoordinated, energy-less Vision overcomes inertia & develops momentum – Why & what (drives how, my how is your what  how  their what…) Set out the alternative visions when one is not clearly correct/ chosen – Compare the pros and cons
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Vision Checklist
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Step into the future and look back – Describe future in outcome language: “We have achieved…
• Sales turnover, Employees, Customers, Beliefs, Actions steps, Competitors
What will we look like, What is our core product, service or skill, What people will we have, What will our ads say, What will our customers demand, What will our plant and offices look like, What will we excel at, What will the market think, What will our p/e and share-price be, Who will our customers be, Who will our people be, Who will the competition and partners be, How will we feel, How will we operate, How will we think, How will we respond to the demands, Where will we be located, where will we do business When… Why…

• • • • •

Cover what matters omit what does not, not the other-way around

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How To Establish The Vision (or Goal)
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Gather stakeholders at a PIW Programme (or Project) Initiation Workshop – Adequately prepared & empowered to make decisions & commitments – May be many days (or weeks) of pre-meeting preparation
• Interviews & questionnaires have their place, but are rarely a complete substitute

2 Steps – Step 1: Construct a single statement that includes all Critical Success Factors
• Stakeholders must sign-up to the statement (or recognise the change initiative is in for a political future) • Identify and resolve conflicts over what is constrained, controlled & consequential

– Step 2: Identify the deliverables
• Impacts, outcomes, results
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Meeting Conduct
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• • • •

One focus Limit duration All areas represented Contributions to project required by each stakeholder group also identified

Objective: a sentence or paragraph that everyone agrees to

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Impacts (or Deliverables)
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Are all the needs of all the stakeholders met by the minimum set of outcomes? – Customer view of the definition of scope – Basis for identifying customer’s specification & acceptance duties – Basis for planning all project activity (Supplier scope view) Bridge between – Customer interest – right things produced – Supplier interest – things produced correctly Basis for planning quality, budgeting & scheduling – Foundation stone for all resource, schedule, cost and time estimates

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What vs. How
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• •

Programme (& project) TOR/ PID sets out the what – Planning determines how What is business oriented – Definitive statement of needs – Basis for future detailed requirements specification

How is technically oriented – Leads to project specification I.E. planning/design and the management & technical plans – Limited by resources and skills available – PID gives enough context to plan requirements gathering (waterfall approach), or set the time or budget limits (iterative approaches) • What and How cascade – Businesses “how” is Programmes “what”, Programme “how” is project “what”
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Requirements
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Requirements phase extends description of goal & deliverables into full specification – Full specification resolves all decisions and confirms assumptions – SMARTer the requirements then the greater the precision of estimated cost/time/scope – Requirements specification is the scope baseline & acceptance criteria
• Functional and non-functional acceptance criteria

• •

Basis of quality: good requirements a prerequisite to achieving quality – Crosby’s definition of quality is “Conformance to requirements” Requirements must be traceable back to the business’ needs & forward to acceptance tests to be performed – Writing requirements is a waste of time: just write acceptance criteria!

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*Phillip Crosby: Quality is Free 81

Reminder of Obligations
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This is a complete training course in our project skills series! And for FREE if used for personal, individual development!! – No catches everything needed is within this file If you want to use this intellectual property as a commercial offering that’s fine too as long as you cut me in  I don’t want much !! – Pre-arranged commercial use removes this notice, gives you animated slides that build procedures step-by-step, also step-by-step exercise files, instructor notes, suggested time-line for delivery and support
– For non pre-arranged commercial use (IE where you charge a fee) I hereby offer you a contract to use this materials, without prior notice in a commercial context at £1,000 per day or per copy which ever is the greater (that’s an ‘offer’ and notice of ‘consideration’, use will constitute ‘acceptance’ and forms contract) – as soon as I become aware of use I will start proceedings to collect fees due If in doubt – Ask 

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Funding the change with people’s energy The most important budget

Creating The Will To Accept Change

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Next: Creating The Will To Accept Change
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84

1. Limits to Absorbing Change 2. Willing Change It Still Takes Time 3. Management of Change The Prince pub. 1515 4. Prerequisites 5. Feelings vs. Analysis 6. Analyse-Think-Change 7. Who Drives Change 8. Guiding Team 9. Engine of Faith 10. Assessing Sponsorship

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Limits to Absorbing Change
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Harshest limit in the organisation is the rate of change – Limit to what people can absorb into operations – Change plus change > 2 * Change more like Change2

Change follows well-know cycles – Imposed change cycle
• • • • • Shock: “they want to do WHAT!!!!!!!!!!!!!” Anger: “How stupid. They did’nt talk to me. I could have told them…” Resistance: “Any fool can see the problem with…” Acceptance: “…but maybe a new opportunity, benefits…” Helping: “…suppose we…”

Like any process it takes time & needs management*
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* We will explore it later 85

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Willing Change It Still Takes Time

86

Changing behaviours requires – Thought, actions, milestones, budget, incubation time – An owner & champion – An understood & used process – Monitoring, adjustment and control
Enthusiasm

Time New venture
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Realisation
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1st Success

End in Sight

86

Management of Change
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87

• •

Programmes change organisations – People are not good at and do not welcome change ‘No change’ is an evolutionary survival mechanism*

New concept

Resistance

Awareness Incubation

Readiness

Skill acquisition

Application

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*

And it is also an extinction mechanism but that is a later topic

87

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Management of Change The Prince pub. 1515

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“Those who by valorous ways become princes…acquire a principality with difficulty, but they keep it with ease. The difficulties they have in acquiring it arise in part from the new rules and methods which they are forced to introduce to establish their government and its security. And it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. Thus it happens that whenever those who are hostile have the opportunity to attack they do it like partisans, whilst the others defend lukewarmly, in such wise that the prince is endangered along with them.” — Nicoli Machiavelli, 1469–1527
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Prerequisites
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• •

For change to happen it must be connected to goals How do organisations change ? – By changing their people’s behaviours (or changing the people) – By removing the procedures and rules that are obstacles to change For change to happen people must be dissatisfied with the status quo Why do people change – Because they feel they will get an improvement from the change (and they don’t change out of fear that they will lose what they have) – Feel that is its possible to achieve No change until the empowered can see past restrictions – Historic, real or imagined

• •

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Feelings vs. Analysis
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90

Necessary and sometimes sufficient

s way allway s and a 1sstt an d gs 1 eelliin gs e n Fe F mes etiime s m et nd & so m nd & so l2 2 ona tiiona l Ra t Ra

See
• Necessary but not sufficient

Feel

Change
T NO s,, NO T n ion s ncllus iod c us on to c s to c o aroun d t un fac s way t fac t er way aro ng’’ fi t pi ng oplle fi he oth er pe Pe o Pe e oth ion Stop pi top th t pt ion S O pt lllled ‘‘O ed Ca Ca

Analyse
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Think
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Change
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See the writings of John Kotter EG The Heart of Change for further discussion of this topic

Analyse-Think-Change
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91

Is not motivational – Change fails because of
• Fear of failure • Lack of a vision of success leading to:… • We don’t try

Is important – May trigger the See  Feel  Change – Helps those with a facts and numbers mindset Relies on expressing the problem based on – Clear parameters – Minimal & explicit assumptions and – Unfuzzy future state
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Who Drives Change
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• •

Not individuals with a day-job on a task force Create a team – Right people: members are ‘chosen’, honoured, respected – Problem members are dealt with – Senior people are in the team and not outside with a veto – Time to do the forceful task Operate as a team – Credible, capable, unbiased, baggage free – Vision beyond the parochial Inside and outside views – Communications and networking, formal and informal authority, planning and control and leadership
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Guiding Team
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• • • •

Sponsor: Supports, funds, communicates, brings authority Champion: Clarifies, walks the talk, decision maker – May be the sponsor Agent: Takes action, shows commitment – Change team member Stakeholder – Affected – Needs to be listen to – Needs to be shown the benefits – Needs time to assimilate the changes Negative stakeholders resist and impede change – Machiavelli: The negative outnumber the positive (at the start)
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Engine of Faith
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Short term wins nourish faith – Emotionally rewards the hard work – Fends of the critics – Creates momentum Visible, in time, unarguable wins – Demonstration that shows movement towards the goals g i ng – Validate the leaders vision uss n scuss i diisc ” hen when d atiions” – Reward the workers ore w uniic at ons ore m un c M M “Com m – Attract the unconverted “Com – Defeat the cynics Without small wins: The cynics invade & large scale change fails With small wins optimism grows
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• •

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Assessing Sponsorship
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Strong sponsorship – Takes a keen interest in programme affairs
• Supports, does not have to be chased

– – – – • •

Controls the required financial decisions Is able to allocate the resources Manages the areas of the business impacted by programme products Resolves issues when escalated

Sets or strongly influences business strategy Look for key drivers EG – Innovative products – Time to market – Response to competitor activities
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Business Threat & Opportunity Uncertain commitment vs. uncertain reward

Business Case is Strategic Risk

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Next: Business Case is Strategic Risk
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97

1. Risk From Selecting Direction 2. Business Case Opportunity Assessment 3. Handling ‘What’ Risk 4. Assessment Methods 5. Project Canine: Business Case 6. Project Canine: Financials 7. NPV Net Present Value 8. NPV of Project Canine 9. What Interest Rate? 10. Project Canine: Interest Rate Affects NPV

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Risk From Selecting Direction
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Limited resources mean rationing – Opportunity Cost – Options forgone Risk that chosen investment is not best available – (or even ½ decent!) Might “lose your shirt” – Customer risk – The supplier still makes a return A project (programme) is the mechanism of choice for an organisation to transform an opportunity into a benefit*

• •

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*Harris definition of a project

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Business Case Opportunity Assessment
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99

Enables assessment of estimated development cost and threats vs. estimated benefits from the opportunity – Ongoing viability assessment throughout the project or programme • Quality Criteria – States costs vs. benefits (utility) sufficiently for decision making – Describes an aligned, politically acceptable initiative
Sources & Inputs – Programme planning, Business Strategy, Project trigger (Customer request, regulatory demand, Options/ Feasibility Study, Project Plan: Cost & Timescale)
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Composition Composition •• Reason Reason •• Options considered Options considered •• Benefits v. status quo Benefits v. status quo •• Key risks Key risks •• Costs/Time from plans or Costs/Time from plans or constraints constraints •• Appraisal: Financial & Appraisal: Financial & strategic strategic

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Handling ‘What’ Risk
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Risks arising from choice of ‘what’ needa assessment by sponsoring group – Identify actions to reduce or eliminate probability of threat event – Ditto enhance probability of opportunity event – Identify actions to reduce/ increase impact of threats/ opportunity outcomes Cost vs. utility assess strategies and actions – Actions directed at the event are included in the baseline ‘Plan A’ – Actions directed at the outcome affects are in the baseline as ‘Plan B’ – EG: Goal ‘Happy family weekend afternoon out together’
• Plan A “Lets load the car up and take kids to the beach this afternoon” • Plan B “but if it is raining there is a bowling alley on the sea-front” • Same petrol needs, variation to schedule (but same start/end), different budget at completion and cash-flow

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*Isn’t this called programme & project management!?100

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Assessment Methods
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101

• •

What makes a change an attractive proposition? Non-financial measures – Alignment – Utility Financial measures – Payback and Payback period – Return on Investment (ROI) – Net Present Value (NPV) – Internal Rate of Return (IRR) Sensitivity analysis Probabilistic assessment
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• •

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Project Canine: Business Case
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102

• • • • • •

We love dogs (utility*)
– or

There is no other canine opportunity like this one (prove it!)
– or

Canines are our chosen future (utility & alignment)
– or

No one has the canine capability we possess (define it) – We must not allow canine capabilities to develop elsewhere
– or

Felines are out (define it)
– or

The dog warden says…(utility)

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* Utility is a measure of personal, subjective value of some state102

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Project Canine: Financials
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• • •

Is Project Canine worthwhile? Payback (Profit) = Income – Expenditure – payback period = Point-in-time measure (when do you stop counting?) Payback Period – Time required for inflows to equal outflows – Normal to impose a payback rule eg within 18mths
About End of October
Year Income Outturn Net Cash Flow Cumulative Cash Flow 0 0 40 -40 -40 1 0 10 -10 -50 2 5 5 0 -50 3 60 0 60 10

When do the financials matter? – When don’t they?
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ount ccount is ii , D s ttcc,D iatess ls iimpi t ssmp lisresstrrate e o inttere Too To for in for

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NPV Net Present Value
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Interest rates enhance the value of present money – Erode the value of future money – Received less spent = Net Future Value = Present Value * (100%+Interest Rate)Number of periods PV = FV / (100% + Interest Rate)Number of periods NPV = Σ (PV [all Income] – PV [all outgoings]) FV = PV * (1+ip) PV = FV / (1+ip)

• • • • •

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£1.33 £1.21 £1.10 £1.00 £0.91 £0.82 £0.75

1

` `

2

3

4

104

NPV of Project Canine
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105

Assume interest rate of 10% p.a. – Compound rates for period 0 is 1, period 1 = 1.1, period 2 = 1.21, p3 = 1.331

Year Income Outturn Cumulative Cash Flow Net Cash Flow Present Value @ 10% Net PV@10%

0 0 40 -40 -40 -40 -4.01

1 0 10 -50 -10 -£9.09

2 5 5 -50 0 0

3 60 0 10 60 45.08

PV = FV/(1+i)n -9.09 = -10/(1+0.1)1
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PV = FV/(1+i)n -45.08 = +60/(1+0.1)3

105

What Interest Rate?
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Normally mandated by finance – Weighted Average Cost of Capital (WACC) – Derived from bank or gilt-edge rate (Risk Free) – Linked to bank-rate eg LIBOR, Bank of England base-rate Interest rate may vary on a per-period basis – Interest rate on income & expenditure may differ

E & D = Value of firm's Equity // Debt E & D = Value of firm's Equity Debt Re & Rd = Cost of Equity // Debt Re & Rd = Cost of Equity Debt V (Capital) = E + D V (Capital) = E + D E/V = % equity finance E/V = % equity finance D/V = % debt finance D/V = % debt finance Tc = Corporate tax rate Tc = Corporate tax rate

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Project Canine: Interest Rate Affects NPV
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As the interest rate changes so does the NPV – We know that at 0% the NPV was +10k – We know that at 10% the NPV was -4.01k IRR is the interest rate at which NPV is 0 – Highest IRR is best financial justification
IRR = 6.72% IRR = 6.72%
+10


12.5 15

No IRR No IRR
17.5

£10K @ 0% NPV, £k 2.5 0

5

7.5

10

- 0.34
-10
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Discount Rate %

£- 3.65K @ 10%
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Two IRR’s Two IRR’s

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Strategic Alignment

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Next: Strategic Alignment
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1. 5.1 Strategic Alignment 2. Project Slate 3. Business Planning 4. Adding & Subtracting From The Portfolio of Change Initiatives

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5.1 Strategic Alignment
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110

“The key question is whether an enterprise’s investment [in IT] is in harmony with its strategic objectives (intent, current strategy and enterprise goals) and thus building the capabilities necessary to deliver business value. This state of harmony is referred to as “alignment.” It is complex, multifaceted and never completely achieved. It is about continuing to move in the right direction and being better aligned than competitors. This may not be attainable for many enterprises because enterprise goals change too quickly, but it is nevertheless a worthwhile ambition because there is real concern about the value of [IT] investment.” “[IT] alignment is a journey, not a destination”

Enterprise Strategy

Business Functions

Application Architecture

Technical Infrastructure

Sourcing/Staffing

Funding
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* Board Briefing on IT Governance 2nd Ed., ITGI 2003 Section 5.1 p.22

110

Project Slate
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111

Corporate objectives
Be Brand 1 Develop Related Products ROCE Value from Customer Base Staff Innovation & Growth

Differentiate product
ID

Product development ability

Automate process
Sponsor

Cross sell to existing customers
Project Manager Impact Date

Values, training & succession
RAG Status

Project Name/Desc

Stock Management Christmas party

1 Dec 20 Dec

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111

Business Planning
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112

s 3day s 3day 1mth 1mth

30d 30d 3mth 3mth

100d 100d 1yr 1yr

10m 10m 3yr 3yr

20m 20m 5yr 5yr

40m 40m 10yr 10yr

Vision & Values Goals &
Deliverables

Working in the existing culture

Maintaining the culture & communicating SOFT

Cascade chosen Direction Managing the culture Budget calls for the upcoming objectives in strategic agenda

Selecting strategic options Target culture & values Strategy based on current markets or exit Programme Plan

Envisaging future culture & capabilities

Blue-sky

Delivery to project plan

Project plan fits the real-world Tactical adjustments

Emerging / declining Markets (entry) Business Plan Blue-sky

Blue-sky

Products &
Operations

Deploy/ Operation of status quo

Prepare the people Marketing & training

Product Development Product Refinement

Capacity planning Infrastructure development Long-Range Programme planning Balance sheet Skills needed by Strategic Direction Succession planning

Planning & Tracking People

EVA, Quality Logs, Timesheets, ProgressReports Quantifiable detail Delegated tasks & tests

Steering Committee & Board Reports Project Slate Activities by skill Balancing the matrix

Programme Tactics/ Projects RevEx/ CapEx Skills needed in current market places Recruitment & release

Benchmarking

Blue sky

Blue sky Succession planning senior leadership

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Adding & Subtracting From The Portfolio of Change Initiatives
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113

Portfolio of change = Best current use of resources

Project B: £-Cost, Resource-Cost, Benefit (eg NPV, IRR, Alignment)

e ct v Actiiv e s A ct s t Proje c roje P e ct v Actiiv e In- A In-

Project P £-Cost, Resource-Cost, Benefit (eg NPV, IRR, Alignment) Project Q: £-Cost, Resource-Cost, Benefit (eg NPV, IRR, Alignment) New Project Project B: £-Cost, Resource-Cost, Benefit (eg NPV, IRR, Alignment) Project V: £-Cost, Resource-Cost, Benefit (eg NPV, IRR, Alignment) Project S: £-Cost, Resource-Cost, Benefit (eg NPV, IRR, Alignment) Project T: £-Cost, Resource-Cost, Benefit (eg NPV, IRR, Alignment) Project D: £-Cost, Resource-Cost, Benefit (eg NPV, IRR, Alignment)

Changes must queue for capacity to be executed & absorbed

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Logical Model Ltd are specialists in project management knowledge transfer to your people
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114

For further help & assistance – Assist@LogicalModel.Net

+44 (0) 84 52 57 57 07

Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project Risk and Quality Management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® Exam preparation & PRINCE2® use in the real-world – Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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Business Threat & Opportunity Uncertain commitment vs. uncertain reward

Planning Horizons

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Next: Planning Horizons
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117

1. Clear Goals Vs Ill-defined Goals 2. Certainty In The Plan 3. What Is Different In Each Quadrant? 4. Two Dimensions to Uncertainty 5. Risk: Cost Vs. Benefits 6. Early Estimates: Wide Ranges (Unpalatable Reality?) 7. Planning Horizons 8. Rolling Wave Planning Before/ After Stage Boundary 9. Pre-Approval Lifecycle

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Clear Goals Vs Ill-defined Goals
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118

• •

Planning requires knowing the end-point – Although it is possible to prepare when all we know is a journey is afoot Clarity of goal is a determinant of effectiveness* of plan and planning – Reality is that uncertainty and unknown goal’s impact ‘good’ plans – Good plan reflects reality – Very few of use live in the ideal world, many of us plan as if we did – When we plan for reality we hide the provision
• Hidden provisions are wasteful and normally wasted

Express programme (and project) goals in outcome terms using business language

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*& efficiency: which is only relevant AFTER effectiveness achieved

118

Certainty In The Plan
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• •

Runner: We have done just exactly this many times before – Can plan whole project in detail at the start Repeater: We’ve done similar before – Can plan but not so far out at so fine a level of detail – More chance of the unexpected Stranger: We have never done the like – Known to be possible – R&D or consultancy could help improve chances of success Alien: No-one has ever done the like before – May be possible but not known to be – (portions) cannot be estimated, only guessed at

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What Is Different In Each Quadrant?
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Increasing Uncertainty

Unskilled, Inexperienced

Experienced & Skilful
• What are the characteristics of each quadrant? • Risks, Rewards, Controls,… ?
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ct fe affe ct s f ce a ntro ence s controll ffer en d diiffern and co e th d u t o n do th e ecutiion a o How dng,, ex ec How ni ng ex pllan ni p an

Clear Goal

Unknown Goal “Where ever we are going it is ‘away from here’“

Increasing Uncertainty

120 *From Eddie Obeng All Change!

Two Dimensions to Uncertainty
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121

Time and experience dictate width of range
Probability

Near term and well understood task (runner) Far term and good understanding Near term and poor understanding

Any Level
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Estimate

Cost or Benefit, Time etc
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Risk: Cost Vs. Benefits
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122

Worst Imaginable Possible Best Imaginable

k Rs k h Riis Hiig h Hg

Best Imaginable Possible

Costs
k Ris k w R is Lo w Lo

Benefits

Worst Imaginable

Best Imaginable Possible Worst Imaginable

Worst Imaginable Possible Best Imaginable
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Costs
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Benefits
122

Early Estimates: Wide Ranges (Unpalatable Reality?)
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123

Design/ Contract Requirement/ Heads of Agreement
Business Winning’s Reality?

Concept/ RFP, ITT Quality of Scope Definition
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Quality of Estimate Width: Height 123

Planning Horizons
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124

Selection of stages based on planning horizons
– Often impossible to plan the whole project in detail due to uncertainty about future work, changing environment and business conditions

Starting up a task Plan the planning

Investigation

Technical work Run to the detailed plan

Technical work Run to detailed plan

Technical work Run to detailed plan Updated Updated Project Plan Project Plan Update overall plan at closure 3rd Stage

Creates the overall plan. Complete but detail decreases with time to horizon The horizon is not far off at this point in the project! Detailed Plan Short time horizon

Project Plan
Detailed Plan Short horizon Refine overall 1st Specialist Stage Detailed Plan Short horizon Refine overall 2nd Specialist Stage

Initiation Stage
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Management Stages
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Rolling Wave Planning Before/ After Stage Boundary
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125

As detailed as is possible with what we know today
Time Now Planning Horizon Far Term Activities

Planning Packages

Work Actuals packages Near Term Activities
Named resources Detailed tasks Final/Definitive Estimates
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Generic resources Activities Indicative Estimates
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Generic resources Phases ROM Estimates

125

Rolling Wave Planning
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126

As detailed as is possible with what we know today
Time Now Planning Horizon Work packages Far Term Activities Planning Packages Actuals Near Term Activities
Named resources Detailed tasks Final/Definitive Estimates
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Generic resources Activities Indicative Estimates

126

Pre-Approval Lifecycle
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127

Identify benefits in order to identify actions to achieve them – NOT to justify creation of deliverables
Identify Identify business business drivers drivers Specify Specify benefits in benefits in context context

Analyse Analyse org’tn org’tn

Design Design transition transition

Repeat Repeat Plan Execute Evaluate Plan Execute Evaluate or or realisation plan results realisation plan results Done? Plan Execute Evaluate Done? Repe realisation plan results Plan Plan realisation Project Projectrealisation Execute Execute plan plan Evaluate Evaluate results results

Know the strategic/ Know the strategic/ tactical imperative tactical imperative Know Know required required change change
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Identify full(?) Identify full(?) contribution & contribution & cost cost

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Approval Approval Project Plan Execute Ev Approval realisation Plan Execute E plan r realisation plan Project Plan Execute Project Assign Assign Approval realisation Plan Execu plan Approval realisation responsibilities pla responsibilities Project Project Approval 127 Approval Project

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Defined, dissected and inter-related

Project And Programme Defined

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Next: Project And Programme Defined
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129

1. Definitions 2. Portfolio 3. Programme 4. Essentials Of Programmes 5. Definitions Of Project 6. PMI’s View 7. Management

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Definitions
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What is – A Portfolio ? – A Programme? – A Project? – A Phase? – A Work Package – A Task / Activity – A Product?
ts ponen omponen ts c nt c om siigniifiica nt r gn f ca s or s or he r part heiir par ts y fiit togethe r re t t are t he do the y f t toget e Wha t a Wha How do th How e
mm gramm e d Po a tt And Prrogr ojec An ent? c kes Prroje sP a Ma Whatt Ma ke ame and Diffferrent? d Dif e Wh S he S ame an T he T

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Portfolio
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131

• •

A collection of portfolios, programmes and or projects What criteria define ‘collection’? – A common characteristics not related to their goals – All delivered from same resource pool – All delivered to same client – All managed by same senior manager Portfolio challenges – Primary issue often rationing based on resource demands – Solution (mostly) in sound use of project planning techniques

Portfolio

Programme

Project

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Programme
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A collection of projects (each of which is necessary, but not individually sufficient) that are identified and executed to change the business, inline with a vision that would not otherwise be achievable – Greater than the sum of its parts – End-point not SMART (because then it would be a (big?) project…) Often the projects are required to: – (specify &) Build technical enablers, – Business enablers AND – Bring into use in operations

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Essentials Of Programmes
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• •

Included projects are interdependent – Architecture for communications & decision making is crucial Opportunity is expressed in terms of vision or strategy – Evolving need: end-point test is “are we there yet” – Planning & management characterised by allowance for uncertainties Definitional uncertainty – Requirements instability, unknown-ness or complexity Technical uncertainty – New markets or products, technology novelty, (initial) low developer capability Cross-company communication & infrastructure uncertainty – Cross company resource and needs drawn-upon to support programme achievement generates politics & poor communications
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• •

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Definitions Of Project
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134

Definition of, and key characteristics of a project – A temporary management environment created to deliver one or more products according to a specific business case* – A project is the mechanism (organisations choose) by which risk management delivers an opportunity into benefits realisation**

By definition a project has a clearly defined end-point at start-up – Otherwise it would be a (small?) programme – End-point test: Measurable product acceptance criteria achieved – Benefits are enabled but not achieved, Achievement is the CRUCIAL bit*** • Typical project sequencing – Project 1 (often called Feasibility or Technical Options: define possible end points (& Select one) – Project 2: achieve defined, selected end-point – Project 3: refine product capability or pricing/ cost model

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*PRINCE2™ definition **Simon’s definition ***Wrong if we ‘stop’ here 134

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PMI’s View
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135

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Management
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• •

What is “management” ? What is project management – Using status data to make decisions about the best use of resources from this point forward to deliver the products within constraints What is programme management – Steering towards the horizon – The horizon may never get closer but the coast does
• End of the voyage but not the journey

What is portfolio management – Balancing resource availability with demands – Prioritising & rationing

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Roles & Responsibilities

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Next: Roles & Responsibilities
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1. Change Manager 2. Programme Management Team Roles 3. Steering Committee 4. Programme Director 5. Programme & Delivery Manager 6. Business Interface 7. Design Authority (-ies) 8. 1st Phase 9. Design Phase Issues 10. Development Stage Issues 11. Issues In Test Phases 12. Implementation Phase Issues 13. Project Manager’s Day Job 14. Programme Delivery Manager’s Day Job 15. Other Roles
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Change Managers
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Change Management – Identify the stakeholders extract & share vision of the end-point – Forge team & appoint to required roles (part of OBS) – Assign responsibilities for technical & management activity (RACI) Project Management – Creation of products to enable benefits

ob:: ay jjob y Ms D aoplle Ms De op e m • End state specified in product terms at outset or Pg m the p e ss r Pg n the p e s Pj o The t Pjocus o n e proc es ucts) he Programme Management T s t F ocus o th e proc od ucts 1 s F us on th ces pr od 1 oc us on u ces pr – Establishing strategies to achieve the vision d F c od 2nnd F oject prod u 2 c t pr o e • End state evolving during conduct pr llt pr oj r e su ((resu tand systems – Decomposition of strategy into business processes – Creation of projects to deliver the products – Implementation of products and flow of benefits
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Programme Management Team Roles
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Ownership group to – Establish vision – normally the company’s board – Turn vision into strategy – often directors or heads of function – Oversee conduct of the programme – Steering committee • Driving force for change – Business: normally a single accountable person - Sponsor – Programme: causes (rather than specifies) vision, strategy, funding etc to be defined and captured - Programme director • Day to day – Achievement of the programme’s goals - Programme manager – Standards and mechanics - Programme management office – Management of project managers - Delivery manager – Detailed activity to produce the required deliverables -Project manager’s teams
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Steering Committee
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• •

Typically chaired by the sponsor Decision making forum: Clears blockages (or it is useless) – Often source of funding and resources – Often comprised those responsible for benefits harvesting – Responsible for assuring programme progress towards corporate goals Owns end-point risk – Impacted by outcomes and pays for all risk activity – Risk taker & decision maker Troubled programmes have ineffectual steering committees & effective steering committees run sound programmes- period

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Programme Director
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• • • • •

Responsible for getting “What” expressed – Strategic thinking Communicates outward from the programme with business community Drives formulation of business vision and strategy – Editor rather than author, Conductor rather than violinist Drives steering committee for decisions Decision making authority within delegated limits – Secures resources from sponsor/ steering committee/ the line – Architect of management team who can ensure:
• Design of business and technical architectures • Creation of project portfolio • Acquisition of solutions

Liaison with internal audit (or other assurance groups)
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142

Programme & Delivery Manager
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Programme manager – Often combined with (else takes instruction from) programme director – Responsible for getting “How” defined: tactical thinking – Ensures creation of a programme definition that delivers the strategy – Orchestrates or integrates business as usual and project deliveries – Oversees programme activity to ensure continued progress Delivery Manager – Ensures portfolio of projects meet delivery promises – Cross project coordination – Oversees the resource pool – Cares for dependencies and critical paths PMO Manager: runs programme’s internal infrastructure
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143

Business Interface
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144

Business Change Manager – Coordinates with programme manager & business operational management
• Ensures change happens to time-table

– Drives the unfreeze, move, refreeze process • Senior Users – Ensure Subject Matter Experts for each element of the business impacted
• • • • • • Specifying what is wanted Checking at the planning stage that intended quality controls are adequate Performing acceptance activities at hand-over Resolve competing, mutually exclusive demands Prioritise WIBNI from CSF (perhaps) based on Value for Money Representing their constituents not themselves

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Design Authority (-ies)
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• • •

Owns the integrity of the business (or technical) architecture(s) Arbitrates trade-offs between products / projects Establishes interface definitions – Key elements in change control process – Owns protocol for changes to interface definitions Establish product/ domain quality regime – Key to tracking achievement (eg via earned value) Interface definition, ownership and change protocol crucial – Writer vs. reader : Which population is the one and which the many?

• •

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1st

Phase

146

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Team just forming, no direction, no processes – ‘From the book (qms)’ procedures need to be bedded in with the people – Many programme or project hygiene factors have to be set-up from cold – Overhead of setting up the processes makes progress slow – Fast but shoddy efforts now may be a mistake • Plan the planning: First broad brush plan – Respond to pressure for commitment to cost & schedule • Set-up processes: establish ‘enough’ control – Communications: reporting & meeting frequency & format – Quality: standards to be followed & review process – Change control and configuration management – Progress tracking, risks management & issues escalation

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146

Design Phase Issues
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• •

Estimates become capable of greater precision – Prepare to renegotiate an affordable balance of wants & needs Team settles down – May be some challenging behaviours – Gather status data on progress of technical tasks – Induct new team members as team grows E.G. testing, roll-out & development staff join the project Timely decision making is key – Including within the community external to the project Watch-out for gold-plating and scope-creep – Need controls that keep scope quality cost & schedule aligned

• •

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147

Development Stage Issues
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Hardest to gain real insight to progress achieved – Easy to see people busy: 90% complete syndrome – Analyse the data & track progress made or lost into the plan – Understanding of how quality integrates to project definition & planning crucial to tracking progress Changes in one project or subsystem affect others – Vital to control changes with design impact – Understanding of architectures and interfaces crucial to controlling cascading chain reactions

• •

Staff joining need induction Unwelcome (admin/documentation) tasks get left aside

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148

Issues In Test Phases
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• •

Slippage in earlier phases very apparent Configuration management procedures stressed – Payback time if they were well established by knowledgeable people early on Technically induced delays can have disproportionate knock-on effects – Build resolution activity into the plan – Build ability to not need it into peoples mind-set Change control is about compromise and fix Potentially the point at which we identify that what is built is not what the customer wanted

• •

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149

Implementation Phase Issues
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150

Within the projects may need to return to directive behaviours – As deadlines approach so greater need for one voice to issues command – All activity is critical path, slippage becomes irrecoverable Acceptance & approval at milestones hard to achieve – Customer/ recipient unwilling to be accountable for risks they cannot judge Implementation manager/ management of change – Transition throws up many unexpected issues – Cheaper/ faster/ more sensible to be able to cope than design out*

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*Unless, for example the product is a Nuclear Power Station 150

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Project Manager’s Day Job
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Monitor! – What ? And How ? – Intra-project • Determine actual progress & accommodate variances – Identify opportunity and problems • Maintain team culture • Direct the work through the daily & weekly routine – Delegate tasks – Manage risk, issue, and change processes – Conclude current phase & start the next • Constant communications – Manage within programmes & integrated teams – Report to corporate or programme management – Listen and watch the organisation/ programme
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Programme Delivery Manager’s Day Job
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• • • •

Monitor! – What ? And How ? – Inter-project Reflect status in programme critical schedule, products-set & resources Maintain programme work focus Direct the work through the daily & weekly routine – Look for inter-project cooperation & contention – Inter-project risks – Inter-project change Constant communications – Manage across the projects & teams – Report to sponsors / owners – Listen and watch the organisation
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Other Roles
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Project or programme support office – Consolidate reporting – Provide expertise & tool support – Police use of project management process: Carrot & stick • Configuration librarian & document control – Set-up safe storage for artefacts created – Operation of version control tools – Guardian of test-beds – Administrator of change and issue management processes • Project or quality assurance – Police use of product development standards – Ensure the right people perform the right tests at the right time – Independent view of team’s diligence and progress
• Direct reporting line to senior project or programme management
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What do we do ourselves & what do we buy-in?

Deciding The Approach & Structure

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Next: Deciding The Approach & Structure
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1. Make-buy Decision 2. Staffing 3. Staffing Strategies 4. Pros & Cons of Matrix 5. Resources 6. Remote & Virtual Teams 7. Remote Team Results 8. Culture And World View

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Make-buy Decision
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156

Impacts and outcomes may be created:… – In-house: our people, skills, resources, management and total risk – In-house with contractors: our resources, management and total risk – Out-sourced: Risk apportioned as described in the contract Outcomes may be:… – Made for us: bespoke* solution for unique capabilities in market – Adapted to us: variation on a common theme – Packaged: we adapt to the solution for cost/ speed benefits

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*As in clothing industry where a tailor/ dress maker makes a one-off item to the customers measurements and choices 156

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Staffing
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• • •

Project oriented Matrix Functional

• • •

In the line Seconded Out-sourced

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Staffing Strategies
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Projectised – Skills pool allocates staff 100% to project – Often seen as inefficient
• Efficiency is only a relevant comment after achieving effectiveness

– Best solution for projects: if benefits come from projects this is the choice
• May not be best for the people’s career development

Matrix – Staff organized in skill groups along functional lines – Functional manager allocates staff as requested by projects – Salary budget sits with functional manager – Staff have some %age of time allocated to each endeavour – May have to balance demands of project and day-job – Consistently the worst solution for project delivery
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Pros & Cons of Matrix
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159

Combines the strength of functional specialisms with cross function teams and efficiency of Senior resource usage Management Needs world class ability in PM to avoid every change running at pace of the slowest bottleneck

Supplies skilled resources & manages career progression Creates technical context (Standards, tools etc). Conducts technical tasks & quality reviews

Strategy

Change Initiative

Business Process

Product Development

Business Transf’tn

I’m’tn & Rollout

Ops Support

Project α
Runs the project to plan day-to-day Conducts risk, change, resourcing, accounting & review cycles
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Project β Project γ
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Plan i/f

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Resources
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160

Programmes use significant levels of resource – Drawn from the line – Shared (bottleneck resources) common in legal, product development, operations and marketing functions Programme initiation must secure line commitment to resourcing activities – Programme manager/ director’s job to ensure delivery against commitment Resourcing includes those to run the programme plus user obligations Project managers depends on business functions to carry-out tasks – Task management by those who may have no idea how to set-up or monitor progress – Programme manager must escalate failure to meet obligations When taking staff from the line or from outside the organisation – Ensure induction activities to communicate goal, role & processes
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Remote & Virtual Teams
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Corporate geography means teams often physically dispersed – Communications is the make and break of change initiatives – Dynamics of designing solutions means band-width must be high during solution identification and selection Architectures & interfaces key to successful management of communication needs Management best-practice say co-locate people & uses MBWA* – Co-location and MBWA can both be virtual – but bandwidth suffers – As bandwidth decreases so time to transfer increases – Time spent on verification & error-correction increases Mixing world-views means both frustrations and the possibility of break-through solutions soar
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* Management By Wandering About (Physically or virtually) 161

Remote Team Results
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162

Group vs. team – A team shares a goal – Each member relies upon the others – 1 + 1 + 1 = 4 in a team 1 + 1 + 1 = 2 in a group Define purpose, process, behaviours – Purpose: Goal – Process: working practices that accommodate behaviours – Behaviours: Differing world-views result in differing approaches Establish appreciation of benefits of differences – Build trust – Identify potential for frustrations and means to defuse It takes lots of time plus a travel and subsistence budget
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Culture And World View
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• •

Sequential vs, Synchronous – Time is too important to waste, focus on one thing at a time, be on time – Many things at once and when I get around to it, whenever Doing vs. Being – What you achieve – Who you are and who you know Open vs. Closed – Feedback is useful and to be encouraged – Feedback is enforced criticism/ loss of face Personal space: up-close vs. wide – Diameter of ones personal space Speech: Interrupt vs. gaps – Over-talking is normal – Waiting for others to finish speaking is good manners
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Rules based vs. relationships – The organisation is about rules and consistency – The organisation is about community and support Solo vs. Delegation – Individuals can make decisions for us all – Delegates gather and report back Management as infallible – Managers know the answers – Managers do not (have to) know the answers Formal vs. Informal – Use titles, expect expertise to follow hierarchy, be respectful – Use names, discuss and challenge Business with family or strangers – Business after social – Social after business

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Contracts and subcontractors

Procurement Of Goods And Services

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Next: Procurement Of Goods And Services
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1. Assignments & Contracts 2. Complex 3. Procurement Process 4. Contract Types 5. Typical Contract Problems 6. Monitoring

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Assignments & Contracts
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166

Managing procured results is just the same as for in-house results(!) – Statement of Work or Outcome plus constraints & reporting needs = contract or PID or work-package – Performance to contract = achievement of outcome – Specification of want is PBS Dictionary and/ or WBS Dictionary – Agree scope and quality, plan tasks & risk, execute, monitor & control, close Make or Buy (MoB) analysis – Can’t build a WBS past the MoB decision – Takes time & costs money to ask the question, select and manage a supplier
• More time & cost to manage two, three, many

– If suppliers have interdependency make one prime – Ensure your contract to the prime makes them accountable
• If success, not blame & damages matters ensure the contracts are two-way
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Complex
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Use the professionals – You wouldn’t write software or lay bricks • Focus on agreement that is mutually beneficial • Read the contract – Don’t let any “we would never use it” clauses remain • PM’s job is to get it done, not do it

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Procurement Process
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• •

Well known cycles – Plan your purchasing activities Send-out enquiry – Request for quotation RFQ – Invitation to tender ITT – Request for proposal RFP

Receive responses possible 1-Specification exceeded, 2-Fully met, 3-Can be met, after a bidders-conference 4-Cannot be fully met, 5-Capability absent – Insist on a standardised response format & weightings – Relegate explanation to an appendix

RFP: Tea brewing Outcomes required • Tea available for not less than 100 people per hour • Service availability to be 0700 to 2300 M-F • Tea available in 4 varieties • All 100/hr able to select any combination of varieties • Serving temperature to be over 95o • Equipment foot-print not to exceed 1m2 • Staff training in all aspects of operation not to exceed 4hrs • Maintenance to be provided not less than semi-annually • Call-out and MTTR not to be more than 2hrs

Rating

Short list – Review their financials, QMS & its use plus other customer’s opinions
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Procurement Process
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Best & final negotiations – Establish payment points (cash-flows) linked to triggering quality control – Retentions, liquidations, bonds and bonuses • Selection & signing – Contract requires & is made by ‘offer’, ‘consideration’ & ‘acceptance’ – Contract law is complex – don’t attempt to manage without expertise • Execution, monitoring & control – Ensure contract type matches need to evolve or vary (or not) the specification during the contract’s life-time • Legal closure – Premature – Through meeting of terminal conditions – Inform the other party formally
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Contract Types
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Fixed price – The supplier takes all the risk (& should have opportunity) – Should be the most expensive contract type Cost-reimbursable – Costs incurred plus profit margin – Purchaser takes all the risk – Supplier’s incentive may be to inflate the job – All things equal should be the cheapest contract type Time & Materials (T&M) – Mix of the above: eg Fixed labour rate with variable number of hours Gain-share/ pain-share – All contract types can include incentivisations
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Typical Contract Problems
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• • •

Failure to understand all the assumptions each side made Flexibility of interpretation of contracts – Too much is as bad as too little Sub-contractor over bidding its capability – Are not skilled enough to meet the contract terms – Are not resourced enough to meet contract terms

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Monitoring
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• • • •

Base monitoring on your & their experience of each other – Write the right to audit into contracts Go see them, in person, regularly if their performance is important Monitoring can be relaxed if suppliers maintain good audit trails, are open and performing to needs Monitoring (& resultant decision making) must be quicker and more frequent if audit trails are missing, untrustworthy, unavailable or show (negative) variances

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From planning at programme down to Planning at project level The length & the depth of planning

Techniques For Planning

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Response to Strategic Risk & Planning Uncertainties The length of time view

Life-cycles, Stage Gates And Governance Through Approvals

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Next: Life-cycles, Stage Gates And Governance Through Approvals
1. Gates 2. Purpose & Conduct Of A Gate 3. Programme Architecture: Gates Event & Time based 4. Project Internal Architecture 5. Project Decision Points: Granting Approvals 6. Authorities 7. Levels of Programme Control

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Gates
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What is a gate

Why have then

How many different types

Where to put them – In the programme – In the project

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Purpose & Conduct Of A Gate
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Gather all available data at the level of certainty that is competent and cost/ time effective – Decide if we are ready to move on given the uncertainties that remain
• Assess performance to date: maturity of artefacts appropriate to move-on safely • Preparedness: plans plus controls means status will be visible to decision makers
– Controls will provide decision data in timely enough manner to issue directions

A gate is the operation of risk assessment (it doesn’t happen elsewhere it is done here) – Management group at each level owns the process of risk management – Next level up owns threats & opportunities: @ the sharp-end of acceptance – Next level down at the sharp-end of taking actions to enhance or reduce

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Programme Architecture: Gates Event & 

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Programmes need event based & routine gates (projects don’t) Research Extend Infrastructure

Research

Build Infrastructure Build product Deploy to BAU Research Product Research Build product
O pe Deploy to business rat io na Train people

O pe r

at

io n

ab ilit y Deploy to business Train

al

st

Cutover
ls ta bi lit

Cutover op Q1
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Q2

Q3
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Q4

Q1

y

Q2

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Project Internal Architecture .
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179

CoPM

Starting Up a Project

Approval

Approval Controlling a Stage Controlling a Stage Controlling a Stage ControllingEscalating a Stage Handling Controlling a Stage Controlling a Stage Issues Issues, & reporting RFC status Minor Adjust’ts

Initiating a project Define Quality, then Create Project Plan Refine the Business case cost time & Risks Establish Controls equal to Risk

Approval Approval PjBd Approval ApprovalControlling a Stage Planning for exceptions or next stage Update Project Plan Review Business Case & Risk log Ask permission to continue

Appoint Exec & PM

Handling Issues, RFC

Escalating Issues & reporting status

PjM

Design & Engage Project Team

Minor Adjust’ts

PM’s daily monitor & review
Authorise, track & receive completed work

Closing A Project All OK? (Acceptance) What next?

Describe: Goal, Approach, Risks & Deliverables

Authorise, track & receive completed work

How did we do?
Accept new work & Team Planning

Create Approval Plan BC Pack (& Rolling Development © Logical Model Ltd  +44 (0) 845 2 57 57 07 Wave Plan?) Decide tools & Product Based format Planning

Accept new work & Team Planning Managing Do the work Product Managing Hand over the products Delivery Ltd © Logical Model Managing Product Delivery Activity Based Product Estimate Delivery Schedule & Assign Planning Resources Resources

Do the work

TM
text

Hand over the products

Respond to risk in plan

179 descriptive Add

Project Decision Points: Granting Approvals
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180

Method plus gates = Governance – Approval to investigate the idea – Approval to invest in qualifying the business case – Approval to proceed to each visible horizon – Approval to proceed when changes arise
• Change whose possibility was foreseen or not • Change that is optional, mandatory, positive or negative

– Approval to close the project
• Prematurely • Completion of development • Transfer of assured benefits stream to BAU

Key to gating process is to ask “ready to move on?” NOT “Done everything planned to date?”
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Authorities
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181

Direction of the market, regulators etc Unprecedented Unlimited decision Departmental & precedented decisions Technical architecture within delegated limits Realisation decisions within project limits As-built within team’s limits
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Mandated externally Board

Directors

Mandated corporately Market place design Programme/ project constraints Business design Programme/ project interpretation Technical design

Heads of Function Programme Management Project & Team Management Technical & Operational Expertise
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Corporate Management

Levels of Programme Control

182

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Programme Management Team Project Board Up a
Starting Approval Approval Controlling a Stage Initiating a Controlling a Stage Escalating Controlling a Stage Appoint Project Exec Handling Controlling a Stage project Controlling a Stage Issues Controlling a Stage Define Quality, & PM Issues, & reporting then Create RFC status Project Plan Design & Minor Refine the PM’s daily Engage Adjust’ts Business case monitor & Project Team cost time Approval Approval Approval Controlling a Approval Planning for Stage exceptions or next stage Update Project Closing A Plan Project All OK? Review (Acceptance) Business Case What next? & Risks review & Risk log Establish Describe: Goal, Authorise, track & receive Ask permission How did we Controls equalt to continue Approach, Risks completed work do? to Risk & Deliverables Create Approval Accept new work & Team Planning Managing Do the work Pack (& Plan BC Managing Product Delivery over the products Managing Stage Hand Development Product Delivery Decide tools Product Based Activity Based Estimate Schedule & Assign Respond to Add descriptive Product Delivery Plan?) & format Planning Planning Resources Resources risk in plan text
Handling Issues, RFC Escalating Issues & reporting status Minor Adjust’ts

Project Board
Approval Approval Approval Approval Controlling a Stage Handlin Escalating Issues g & Issues, reporting RFC status Minor Adjust’t s Planning for exceptions or next stage

Starting Up a Project

Approval

Approval

Initiating a project

Appoint Exec & PM

Define Quality, then Create Project Plan

Controlling a Stage Controlling a Stage Controlling a Stage Controlling a Stage Controlling a Stage Controlling a Stage Handling Issues, Escalating Issues RFC & reporting status
Authorise, track & receive completed work Accept new work & Team Planning

Design & Engage Project Team

Minor Adjust’ts

Update Project Plan

Closing A Project

Do the work

Refine the Business case cost time & Risks

PM’s daily monitor & review

All OK? (Acceptance) Authorise, What next? track & receive completed did we do? How work Accept new work & Team Planning Do the work Hand over the products Respond to risk in plan Add descriptive text

Review Business Case & Risk log

Hand over the products

Project Manager
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Describe: Goal, Approach, Risks & Deliverables

Establish Controls equalt to Risk

Authorise, track & receive completed work

Ask permission to continue

Accept new work & Team Planning

Team Manager
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Plan BC Development

Create Approval Pack (& Stage Plan?)

Do the work Managing Product Delivery Managing Product Delivery Managing Hand over the products Schedule & Assign Resources

Decide tools & format

Product Based Planning

Product Activity Based Planning Delivery Estimate Resources

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The only reason for a project is to change businessas-usual for your organisation or your customer’s
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183

For further help & assistance – Assist@LogicalModel.Net

+44 (0) 84 52 57 57 07

Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project Risk and Quality Management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® Exam preparation & PRINCE2® use in the real-world – Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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The depth of time view

Project Control And Technical Development Cycles

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Next: Project Control And Technical Development Cycles

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Method “Steps In Planning”: Overview Relationship of Process Groups Development & Management Stages Complex Project Coordination Project Coordination Within The Programme Planning Levels And Involvement For The Teams Programme Breakdown From Vision to Project Levelled Plans Interfaces Between Project Teams Plans Within Plans & Handoffs from Plan to Plan Programme Architecture Managing Through Dependencies Verification & Acceptance Verification Scope Verification Occurs Throughout The Project
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Method
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• •

What is a Method ? – Why have a framework What are the benefits – Who gets them and when and how
Investigation Creates the overall plan. Complete but detail decreases with time to horizon Run to the detailed plan Run to detailed plan Run to detailed plan Technical work Technical work Technical work

Starting up a task Plan the planning The horizon is not far off at this point in the project!

Updated Project Plan

Updated Project Plan

Detailed Plan Short time horizon

Detailed Plan Short horizon Refine overall

Detailed Plan Short horizon Refine overall

Update overall plan at closure

• •

What are the costs – Who pays them, when and why What are Job Descriptions? – Same questions…
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“Steps In Planning”: Overview
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Needs or Objectives Needs or Objectives Strategic Risk Strategic Risk Deliverables Deliverables Bill of Materials & Quality Description Bill of Materials & Quality Description

Prog Pr r or S ogramme or S A amme ..A.. P ro e Projj c ect t Scope

Development
Proj Projec ect t
Resourcing Resourcing

Schedule Estimating
Dependencies Dependencies

Task List (WBS) & Task List (WBS) & Work Assignments (OBS) Work Assignments (OBS)

Schedule Baseline Schedule Baseline

Scope & Responsibility Scope & Responsibility Baseline Baseline Response to Response to Tactical Risk Tactical Risk Finalised Finalised Cost/ Time/ Scope baselines Cost/ Time/ Scope baselines

Cost & Resource Estimating
Cost Baseline Cost Baseline

Monitoring, Tracking Monitoring, Tracking © Logical ModelControl 57 07 & Control57 (Quality) & Ltd  +44 (0) 845 2 (Quality)

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Relationship of Process Groups
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188

• •

5 stages of a project and of a phase (programme adds harvest) Initiate, Plan, Execute, Monitor & Control, Close*
Executing/ Develop Planning/ Define Initiating/ Decide Closing/ Deliver

Activity

Monitoring & Controlling

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* p.68 A Guide to the Project Management Body of Knowledge (PMBOK Guide), 3rd edition 2004, Project Management Institute

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Development & Management Phases
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Planning Initiating Executing Executing Planning Closing Controlling Controlling Planning Controlling Planning Executing Controlling Planning Executing Controlling Closing Executing Executing

189

Planning Controlling

Investigation

Design

Build

Integrate

Accept

Deploy

Maintain

Go/No-Go Go/No-Go Go/No-Go Go/No-Go Go/No-Go Go/No-Go Plan Closing Initiating

Executing Planning Initiating Planning Controlling Closing

Executing Planning Controlling

Executing Planning Controlling

Executing Planning Controlling

Executing

Controlling

I

D B I A

D

I

D B I A

D

I

D B I A

D

I

D B I A

D

I

D B I A

D

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Complex Project Coordination
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190

Work steam

Work stream

Work stream

Work stream

Work stream

Work stream

1

2

3

4

5
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6

7

8

9

A

B

C

D

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Project Coordination Within The Programme
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191

Strategy Commercials

Identify Opportunity

Qualify Opportunity

Bid for Opportunity

Negotiate Ts&Cs

Maintain customer relationship

Change Initiative Business Process

Initiation

Programme Plan

Concept

Architecture

Design

Training Design

Validation

Integration

Product Development Business Transf’tn
Implementation & Roll-Out

Infrastructure Architecture

Design

Construction

Validation

Operational Support

Applicatoin Architecture

Design

Construction

Validation

Operational Support

Preparati Test Specifications on

Conduct tests

Customer acceptances

Release

Operational Support

Operations Support
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Design for Support Specification

Create Support infrastructure

Operational Support

Decommission

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Planning Levels And Involvement Context Business For The Teams
Pgm Team Sponsor PM Programme Project Deliverables Work Packages Work Packages Work Packages Deliverables

192

Shareholder

Competition

Vision Goals Goals
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Regulators

Team Leaders 192

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Customer

Goals

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Programme Breakdown: From Vision to Project

193

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Levelled Plans
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194

1st plan an outline at programme/ strategy level of products – Establish major schedule, cost & function cascading constraints – About commitments and authorisations
• Definitional uncertainty until lower level plans produced

2nd plan activity at each subsidiary levels within constraints – Define resources, tolerances & buffers to protect critical sections
• Look for critical chain of resourcing, schedule, risk • Be ready and able to accommodate under & early as well as over and late

– Escalate imbalance between schedule, cost & scope up to programme

Subsidiary Plan

Subsidiary Plan

Programme Plan

Subsidiary Plan

Subsidiary Plan

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Interfaces Between Project Teams
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• •

Draw-off of specialisms from functions Skills & tools focus plus customer and end-point focus Senior Management Great when well implemented – Significant challenges (more later)

Strategy

Change Initiative

Business Process

Product Development

Business Transf’tn

I’m’tn & Rollout

Ops Support

Commercials Project Manag’t Business Process Business Change Implementation & Roll-Out Service Support

Identify Opportunity Qualify Opportunity Initiation Concept

Bid for Opportunity Design

Negotiate Ts&Cs Training Design Design Design Validation

Maintain customer relationship

Systems Engineering

Project α Project β Project γ

Programme Plan Architecture

Integration

Preparation

Infrastructure Architecture Applicatoin Architecture Test Specifications

Construction Construction

Validation Conduct tests

Operational Support Operational Support Operational Support Operational Support

Validation

Design for Support Specification

Customer Release acceptances Create Support infrastructure

De- commissi

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Plans Within Plans & Handoffs from Plan to Plan
g doiing on ds d nee ds ee t n ha Wha t W

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WBS


Work Package 3

OBS

R A C I

Work Package 2 Work Package 1
WBS

Activities

t do iit do to ned to ed g sig n as i s as s iis Responsibility Assignment Matrix (RAM) o Who Ltd  +44 (0) 845 2 57 57 07 WhModel © © Logical Responsible AccountableLogical Model Ltd Consulted Informed

rk etwo rk two N ns N e atiions to c niica un Comm u omm C

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Programme Architecture
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197

Same crucial need in both cases – Architecture or allocation – Know the interfaces/ protocols for message passing!

Commercials

Identify Opportunity

Qualify Opportunity

Bid for Opportunity

Negotiate Ts&Cs

Maintain customer relationship

Project Manag’t

Initiation

Programme Plan

System Engin’g

Concept

Architecture

Tooling

Detailed Design

Validation

Integration

Software Engineering

Software Architecture

Design

Construction

Validation

Operational Support

Hardware Engineering

Hardware Architecture

Design

Construction

Validation

Operational Support

Product Delivery

Preparat ion

Test Specifications

Conduct tests

Customer acceptances

Release

Operational Support

Through Life Support

Design for Support Specification

Create Support infrastructure

Operational Support

Decommission

Investigation

Design

Build

Integrate

Accept

Deploy

Maintain

Investigation

Design

Build

Int’gt

Acpt Build

Dply Int’gt Acpt Build Dply Int’gt Acpt

Maintain

Dply

PM’s territory Technical Specialist

Inv’gt

Dgn

Build Inv’gt

Int’gt Dgn

Acpt Build Inv’gt

Dply Int’gt Dgn Acpt Build Dply Int’gt Acpt

Maintain

Dply

I

D

B

I

A

D

I

D

B

I

A

D

I

D

B

I

A

D

I

D

B

I

A

D

I

D

B

I

A

D

Maintain

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Managing Through Dependencies
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198

Programme Plan
Team Plan Team Plan

On Schedule Early

Team Plan

Team Plan

Team Plan Team Plan Team

Late
Team Plan Team Plan

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Verification & Acceptance
Planning Executing Licensed for individual use without fee. A commercial license (License@logicalmodel.net) removes this note: Please report unlicensed commercial use & share in fees levied Executing Planning Controlling Executing Planning Initiating Controlling Controlling Executing Planning Executing Closing Controlling Planning Controlling Planning Controlling Executing

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Requirements

Design

Build

Integrate

Accept

Deploy

Maintain

Go/No-Go Closing Initiating

Plan

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Verify Scope (via quality techniques)

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Verification
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200

Built it right & well – Intermediate / structural: the construction process

Process Inputs Process Definition

Faults List

Process Definition Verification

Process Checklist

Process

Check
Conform 2 Spec
Milestone Achievement

Do
• Process of evaluating that products produced by a process meet the conditions imposed on the process
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Process Outputs

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Scope Verification Occurs Throughout The Project

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If outcome of each of 8 stages is 90% correct, how cumulatively correct is end product? – What do we need from our internal acceptance process?

Need

0 10 21 0 1 1 1

100 90 81
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Project

72 63

Phase Boundaries

54

Satisfied need

Scope creep is uncontrolled expansion of programme work beyond budget – Commonest cause is ‘pride in a great job’

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Creating Programme Plans

Planning at Programme Level

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Next: Planning at Programme Level
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203

1. Planning A Programme 2. Key Programme Phases 3. One: Identify Projects 4. Two: Project Interdependency 5. Three: Project Planning 6. Four et al.: Confirm Programme Fit

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Planning A Programme
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• •

Same fundamental tool-kit as planning a project Focus differences – Programme goals develop and change as projects are executed – May need feasibility and study projects to formulate the goals – Building blocks are project deliveries, therefore interdependencies – Project slippage has knock-on effects that have to be overcome – Output of programme planning is schedule of linked projects that deliver business enabling change Programme plans move the organisation from a stable state to a new stable state – Sometimes repeatedly
Research Extend Infrastructure Product
O pe

Research Build Infrastructure Build product

ra

tio

na l

Research

ilit y Deploy to business

st ab

Build product Research Build product Deploy to business Train people

Product

Train

O pe

Cutover
ra tio na l

st ab

Cutover op

ilit

y

Q1

Q2

Q3

Q4

Q1

Q2

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Key Programme Phases
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205

1. Establish business plan: expressed as a vision or:… – 5 year plan, Strategic direction 2. Create the programme plan (4 steps) 1. Break vision into products and capabilities 2. Establish inter-dependencies 3. Create project delivery plans
• Business “in-the-line” plans, IT plans, product plans, marketing etc

4. Confirm fit with programme constraints 3. Execute the plans – Monitor and adjust – Re-plan to reflect changing reality 4. Collect benefits
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One: Identify Projects
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206

• •

Step 1: identify the programme impacts – Assign impacts to suitably scoped projects Programmes gain projects in two ways – Existing projects “assimilated” by programme formation
• Must detach from original sponsor • Otherwise (and often do) continue to run to hidden agenda

– Projects created in the programme
• Well defined deliverables, skills base and dependencies

Aim for the simplest set – Minimum number of interfaces – Establish vendor supplied components as projects • Brainstorm the ‘outcome’ breakdown structures – Use affinity techniques to scope projects (Work breakdowns) – Use Organisational Breakdown Structure & RACI to assign responsibilities
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Two: Project Interdependency
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• •

2nd step: Assess interdependency between projects – Managing dependency is often the programme’s major challenge Interdependency results from – Need to use the products of one project as input to another – NOT sharing of resources such as test bed or individual with rare skill
• Resource constraints are modelled using Gantt charts and resource histograms

Common impacts – Risk or issue with footprint that affects multiple projects
• EG reliance on event external to the programme

– Sign-off, budget allocation or board approval • Use dependency network diagram techniques to sequence project phases

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Three: Project Planning
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• •

3rd programme planning step is project planning Programme’s requirements outlines project goals & constraints – Business architecture, – Required product set, – Major milestones – Rough-cut financial and resourcing limits Project teams plan the achievement of goals within constraints – Affirm or escalate challenge to practicality of programme plan Projects use PBS/WBS, network diagrams, Gantt charts and resource loading charts to establish schedule & budget

• •

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Four et al.: Confirm Programme Fit
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4th step: Confirm projects fit within programme plan – Calculate programme critical path – Assess resource loading – Calculate programme cash-flow and earned value curves
• Contingency, risk reserve and management reserve

• • •

‘5th’ Baseline projects – Scope, schedule and costs ‘6th’ Move projects into execution, through delivery Programme repeats steps 1 through 4 periodically – As each stable state is achieved – As issues force re-planning – As dictated by authorised programme changes
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Acceptance, handover and close-out for programme and project

End Points Quality is Scope is Quality is…

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Next: End Points Quality is Scope is Quality is…

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Scope and Quality Programme & Project Scope Expectations & Acceptance Criteria Specify & Accept Quality Drives Activity Measuring And Estimation Of Quality Attributes Example: I Want A Fast Car Product Descriptions Work Packages Deliverables Sign-Off of Deliverables Close-Out Works Bottom-Up Product Close-Out: Handover

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Scope and Quality
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212

What is Scope? ) – Describes what must be produced ent ( m t tement (lliimiit ) Sta tem Sta – Everything that must be delivered of want of want to resolve the need – Everything that must be done to create all deliverables What is Quality? – Conformance to specification, fitness for purpose, ... Scope and quality are tightly coupled

• •

odness o odness iits of g o m ts of g Liim L
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Programme & Project Scope
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213

…Programme…
Need

Project

Phase Boundaries

Product (satisfied need)

Scope is – All the things or outcomes that we produce
• • To satisfy a stakeholders needs or wants Including intermediate deliverables

All the things we do
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Expectations & Acceptance Criteria
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• • • •

What are expectations? What are acceptance criteria? Conformance to specification: Customer’s duty to specify want or need – Team’s duty to achieve specification Fitness for purpose: Customer’s true goal – Impossible for the supplier to guess Excite & Delight: Source of repeat business

• •

ld shou lds hou t ct s rojjectremen ts o e i emen No p r equ ir No p r equ d r cee d exce e ? ex ed re e d ? A g re Ag

Quality might be: Balance between the totality of characteristics that bear on real (stated and implied) utility – Customer quality interest – right thing – product – Supplier quality interest – things produced correctly – process
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Specify & Accept
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215

Acceptance is at project end – Based on conformance to specification (c2s) – Programme end may be the c2s or transfer of stability into BAU Supplier’s need is specification before activity – Do it right first time Customer interest is fit-for-purpose (ffp) Contract settles whose risk the match between ffp & c2s is – The two are different – The difference is profound – Caveat emptor Specification is at project start (vision at programme start)
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• • •

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Quality Drives Activity
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216

Activity focussed on quality products – Quality products resolve all stake holders’ needs – Focus on both project (process) and product quality Crucial to understand quality at the planning stage – Never enough time to do it right, always enough time to do it again – Plan the tasks to produce results right first time Specification before planning makes projects easy(-ier?) We must know what a good result looks like if we are to confirm achievement – Achievement required to confirm performance to plan: tracking – Value for money

• •

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Measuring And Estimation Of Quality Attributes
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217

• •

Functional specification is common and relatively easy
– Text, diagrams and specification languages

Good quality specification is rarer & key to determining cost & schedule
– – – – Scale & tests to measure Best required & worst acceptable Current & target value (& achievement date) Best possible (State of the Art)

Convergence of Scope & Quality
– Captured in the WBS dictionary

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Example: I Want A Fast Car
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218

• •

How much should we budget & schedule for this project ? Detailed Requirements: “Boy racer” impressing his friends on the street
– Scale: – Test: – – – – Worst Acceptable: Target Best Required State of the Art Acceleration Time taken to achieve 60 mph from standing start 8 seconds 5 seconds 4 seconds 3.6 seconds

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Example: I Want A Fast Car
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219

• •

How much should we budget & schedule for this project ? Detailed Requirements: Attempt on World record for wheeled vehicle
– Scale: – Test: – – – – Worst Acceptable Target Best Required State of the Art Miles per hour Maximum average speed achievable over measured mile 760 mph w 800 mph know ’tt kno n don ’ 800 mph ou dothe Y ou Y the edulle 750 mph ue d

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Product Descriptions
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220

• •

Product Breakdown Structure Dictionary Provides detailed description of product to be delivered – Agreed with the customer – May be beyond the customers ability to specify Key elements – Composition & derivation: Component parts & their sources
• Links to product breakdown structures and project plan

– Acceptance criteria: Scales, and acceptable ranges on the scales
• Links to progressive gauging of product maturity levels & tracking progress

– Method of confirmation: How the measurement will be performed – Skills & pre-requisites: Who will measure and with what equipment

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Work Packages
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221

• Work Breakdown Structure Dictionary – Details the activity to produce one or more products (or impacts) • Includes product descriptions : “what” the results of required activates are – Interfaces between these products/ impacts and other project results • Project controls to be applied: “how” to measure progress to completion, escalate issues and perform configuration control – What to do at completion • Product development standards to be applied – Specifies “how” (processes, standards, verification, acceptance, handover of) the products/ impacts are created
• Constraints on process made explicit before scheduling & budgeting • Quality planning (selecting standards), predominantly a supplier focus
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Deliverables
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222

• • •

End point when (final) deliverable* accepted by the customer – Deliverables not necessarily physical: change in the state of the world Everything required by all stakeholders to declare the project successful (IE includes controls) One definition of scope == The deliverables, all the deliverables and nothing but the deliverables – Other is Tasks, all the tasks & nothing but the tasks (to produce the deliverables
Links customer’s right thing done & supplier’s thing done right

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*

Or result or business impact

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Sign-Off of Deliverables
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223

Sign-off often difficult if:… – Receiver unclear of consequence where unseen faults may still exist – Not competent to judge the deliverable Sign-off against the warranty and support capabilities – Sign-off says “Risk assessed and acceptable”, not “everything perfect” Sign-off without correct evidence is potentially fatal mistake – Quality control must have created the audit trail Sign-off is an easy process if pre-requisite project control processes correctly executed Sign-off triggers implementation and close-out

• • • •

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Close-Out Works Bottom-Up
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Project Management LifeCycle

224

Initiation & Planning

Approval

Execution & Control

Acceptance

Closure

Close-out work-package (Acceptance of a Deliverable) Establish Goals & Deliverables – May close phase E Identify Work – May close a & stage s Dependencies t i – May close a project m Establish a – May Resourcing programme close a t
i

ID Stakeholder & Responsibilities

Tracking Quality Control Reporting Change Control

RePlanning

Production handover Benefits Realisation CloseDown

Quality Assurance

Lessons Learned

Do not set “perfect” close-out criteria & Issue Risk n Budget Management g – Tolerances, deviation correction and waivers
Set-up Controls
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Product Close-Out: Handover
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225

• •

Handover of all configuration items – May also include the configuration management procedures Help desk and support need to know how to respond to user needs – Expect highest volume of interaction in initial period and at milestones in successive team’s schedules – Confirm acceptance of project deliverables by all those who will live with them

Deliverables used to generate benefit! – Sponsors starts benefits harvesting – (often) Post project, is within the programme

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If you need training, mentoring or assistance with benefits realisation, governance or projects…
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226

For further help & assistance – Assist@LogicalModel.Net

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Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project Risk and Quality Management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® Exam preparation & PRINCE2® use in the real-world – Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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Activities at Handover (Technical & Business)

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Next: Activities at Handover (Technical & Business)

228

1. Project Implementation 2. Repeated Disruption 3. Roll-out Planning 4. Implementation Steps

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Project Implementation
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229

• •

Critical impact on the business – High visibility Biggest (often newest) stakeholder community – Big test for effectiveness of management of change activities – Use your best people – Those who can be most diplomatic Start of investment payback time – Programme or line management become responsible for benefits realisation activity – New activities; high probability of problems Implementation options have different risk profiles – Big-bang, pilot, phased
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Repeated Disruption
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230

• •

A programme may roll-out change a number of times – Disruption, risk and visibility means focus area Expect progress to fall-off in other programme areas post implementation, but also:… – Be prepared for easy implementation & swift programme resumption Complex and risky: so plan thoroughly: include flexibility – No battle plan survives first contact with the enemy – Prepare well, well in advance – Do not expect “Plan A” to be enough – Have slack capability to prop-up problem areas

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Roll-out Planning
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231

• •

Careful and complete planning needed – Learn lessons of previous roll-outs (checklists or external help) Establish the prerequisite for installation – Technical & business environment – Product status, staff training – Authorities and accesses (logical and physical, business and technical) – Data migrations Roll-out timings are critical to minimising disruption – Perform practice roll-outs Ensure implementation plan identifies – Key personnel by name including contact and alternate contact details – Go/no-go decision points and criteria – Back-out procedures and “point of no return” details
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• •

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Implementation Steps
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232

Train the business users – Change Manager’s biggest focus area – Not just procedure & technical training but also ‘acceptance of change’ • Run model office to create/ confirm business functions – Perform user acceptance test • Deploy system to operational use – Help-desk and maintenance teams – Business units use new facilities and start benefits realisation • Programme moves onto next set of projects or closes – Resources must be balanced between support & fix vs. progress • Business “doing it differently” – Expect teething troubles (perfect takes time & money to refine) – Provide support (cheap & simple but NEEDS to be explained)
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Preparing The Business To Absorb Change

Programme Deliveries

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Next: Programme Deliveries
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234

1. Business Training 2. Model Office 3. Acceptance Testing 4. Recommended Approach 5. Install Time Issues 6. Roll-back & Contingencies 7. Help Desk And Warranty 8. Business Implementation Issues

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Business Training
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235

Requires stable version of procedures (often IT systems) – Integrated forms, roles & responsibilities, business process – Create trained user pool for users acceptance testing For a large roll-out use the “train the trainer” approach – Create regional, product, branch, departmental, internal or external expertise – Timing an important issue
• Too early is wasted, too late is worse

Point at which many new stakeholders make first impression – Management of change issues can be greatly aided by winning-over staff at this point – Frequently an issue (possibly make or break) for programmes (Machiavelli again)

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Model Office
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236

• •

Establish capability for whole business process – Testing, training & all resources to support full product life-cycle Business led function – Business should plan tests with programme & customer staff – Job roles and all transaction types tested
• Start with the ones required on day one

– Data clean-down and refresh operations available (SCM’s role) • Issues with which version of the processes (EG IT) to use – Latest versions often contain flaws – Stable versions may lack features Model office sometimes maintained after implementation for training, data maintenance, test of fixes & features
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Acceptance Testing
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237

Acceptance is: – Validation: built what was asked for – Decision point for roll-out A demonstration that the system meets requirements – Customer satisfying themselves that the acceptance criteria have been met – Acceptance is not a defect detection exercise – Confirmation that sign-off is safe should be based on the audit trails from lower level testing activities*

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*As should the PM’s assessment of achievement 237

Recommended Approach
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238

Validate Goal or Objective Validate Goal or Objective Concept Concept Validate Spec Validate Spec Requirements Requirements Interfaces Interfaces Design Design Integration Integration
White box Subsystem Unit Unit Black box Unit

Black box

System

Acceptance Acceptance
System

System Test System Test

Subsys White box Subsys

Subsystem

Fabricate Fabricate
Review or Inspection
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Item Test Item Test
Unit

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238

Install Time Issues
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239

Users unprepared for delivered change – Forms, process, customer scripts, IT elements changed since training – Training omitted some functions (eg how to access resources/ consumables) – Key users missed some or all of training – Speed (typically slower in production than model office/ training) IT Data conversion – Timing to convert data frequently needs special attention Development team often get diverted from on-going programme projects to support implementation bugs – Predictable risk: plan for it Installation foot-print too big for resources available – Failures increase demands on team
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• •

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239

Roll-back & Contingencies
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240

Ensure we can go back to “how we did it yesterday” or stop-gap measures are on stand-by for major (visible) functions – Verify back-out processes as part of implementation planning – Aim is to ensure that business capability is preserved Roll-back decision points must be clearly described – Criteria for decision – Stakeholders involved Consider variations in needs of departments & functions – Critical sites or users – Novel configurations (extra business or technical complexity)

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240

Help Desk And Warranty
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241

Create a production hand-over procedure and checklist – Involve support staff in programme quality reviews – Use maintenance personnel in fault identification and resolution processes from late system test onwards – Maintain a support presence on-site during immediate post roll-out phase Maintain an event log of help desk calls to aid problem resolution – Bring business functions into the second-line support to handle “how do I…?” calls – Ensure that reported faults are assessed and status communicated to originator
• Don’t set expectations that faults will be fixed • Raise to change board for cost benefit analysis

Support teams need “roll-out” too – Training in development processes, configuration management as well as system architecture & functions, strong and weak points

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241

Business Implementation Issues
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242

True business impact [will always be] different from expected – No alternative but to select (plan?) best impact resolution at time – Prepare probability reduction with thorough risk analysis – Reduce uncertainty with prototypes (eg model office) – If high risk then select pilot roll-out Loss of programme focus – Staff reassigned before finished with – Business stakeholders focussed on coping in the line – Plan accordingly
• Negotiate partial release or call-back process

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Caring For People & Process When Closing Down Initiatives

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Next: Caring For People & Process When Closing Down Initiatives

244

1. Delivery Closeout 2. Project Close-Out 3. Programme Closure 4. Detecting Programme End-Point 5. Programme Closure Triggers 6. Lessons Learned

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244

Delivery Closeout
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• •

Conducted for each delivery Publicity for programme deliverables – Internal to the business: e.g house newspaper, notice boards, intranet – External to the business: press releases, brokers and trade Evaluate post-installation business strategy – Support needed for benefits harvesting – Review product set against operational reality
• Identify gaps

– Plan next set of programme products • Delivery 1 often minimal function (time to market drive) – Delivery 2 often market differentiation (functional drive) – Delivery 3 often perfective / adaptive changes
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245

Project Close-Out
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246

Closeout actions – Release staff
• Complete appraisal or career development activities

– Close budgets & accounting codes – Archive records
• • • • WBS, estimates and matching actuals Risk logs Anything with legal significance Discard everything else

Write End Project Report – When not in a programme (or perhaps even when) ensure benefits realisation arrangements are in place • Hold the end of project celebration
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246

Programme Closure
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247

• •

Programme closeout involves— – Similar activities to project closeout Standard closeout activities – Close time recording and general ledger codes – Terminate contracts and make final payments – Conduct lessons learned – Archive useful information and dispose of rest – Release staff, write appraisals – Hold the party 
e e Closure Closure

RePlanning RePlanning

Production Production handover handover Benefits Benefits Realisation Realisation CloseDown CloseDown

lity Assurance lity Assurance

Reintegration of staff to the line or move to next programme project – Seconded staff may have “gone native” or roles are filled
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Lessons Learned Lessons Learned

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247

Detecting Programme End-Point
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248

Often “over the horizon” – Precise closure-criteria within the projects As projects deliver the questions are – What does the market-place look like? – Can the business absorb further change – What is the cost/ benefit of the next project wave? Have we done enough?

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248

Programme Closure Triggers
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Natural closure – Last required product is in benefits realisation – Research projects conclude ROI insufficient to continue Or Programme lapses into maintenance activity – Closure just an administrative change: programme becomes department or function Premature closure: Steering group terminates programme – Outcomes no longer relevant or not delivering promised benefits
• May be management of change issue • Political or technical capability lacking

– Programme no longer aligned to strategy
• Legislative, competitor or customer actions • Share price and interest rate changes • Mergers and acquisitions
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249

Lessons Learned
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250

Make responsibility of project managers starting-up projects, not of those closing down – Bigger WIIFM Improving corporate capability – What worked well – Processes needing institutionalising – Processes needing improving – Removing bureaucracy that does not add value Lessons learned activities are a key enabler of organisational improvement
r ate r lls llat e aii s de t ” de t a to ” ow o “How t “H

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250

If you are interested in instructor led training we would be pleased to discuss requirements
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For further help & assistance – Assist@LogicalModel.Net

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Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project Risk and Quality Management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® Exam preparation & PRINCE2® use in the real-world – Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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251

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Who Matters & What Do They Want?

Stakeholder Management

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252

Next: Stakeholder Management
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253

1. 2. 3. 4. 5. 6. 7. 8. 9.

Purpose Of Stakeholder Management Sources Of Conflict Programme Conflict Identifying Stakeholders Influence Diagrams Management Strategies Changing Stakeholders Communication Flows Communications Plan

10. Programme Identity 11. Programme Publicity

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253

Purpose Of Stakeholder Management
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254

• •

Identify who to focus communications time and effort on – Those who can make or break initiative Create the communications links appropriate for stakeholder groupings – Sponsor/ User have obligations as providers too – PM has information needs too
Controlling

• • •

Establish and communicate the vision – Establish benefits realisation responsibilities Open dialogue with line management – Secure cooperation and resources
Directing

Identify Gather Stakeholders info

Planning

Implement Strategy Predict behaviour Strategy to manage

Identify interests Strengths Weaknesses Organising

Starts in initiation & continues until programme closure Motivating

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254

Sources Of Conflict
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255

Politics: More impact the programme has the more change in power – More politics and stakeholder management required – No politics suggests no impact – Power bases are increased or eroded Culture or personality clash – Different views on “how we do it here” Day job versus programme demands – Incompatible schedule or workload pressures Conflicts and infighting – Competing objectives in different business units – Differing view of best business or technical solution Unclear roles and responsibilities: gaps or duplications
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• • •

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UD FUD

255

Programme Conflict
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256

• •

Initiation is the time to identify (resolve?) conflicts – When not resolved then build recognition of impact into the plan Tie issues to business objectives & values not personalities – Understand how stakeholders feel objectives are threatened – Instil “many alternate routes to success that I would not have chosen” – Negotiate: “how can we both win”: Focus on outcome not method/ position Alternatively: Use conflict to drive programme aims – Conflict is the mother of much energy & inventiveness Slow progress is caused by poor initiation but… – Symptoms seen during execution – Treatment takes time, costs effort: plan for it – Good initiation may look like (and be) a slow start: benefits see later
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256

Identifying Stakeholders
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257

All those affected by the programme & projects – Primary: responsibility to the programme, formal linkage – Secondary: strong interest without formal linkage – Individuals who influence business direction & prioritisation Assess the interests of each stakeholder – Expectations of the programme – Ability to promote or detract from programme goals People who perceive a lose or a gain: perception is reality

Sabotage

Uncooperative
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Neutral

Apathetic

Support

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Project politics consists of keeping those who don’t like me/the goal away from those who257 have not yet made their minds up - Project management proverbs

Influence Diagrams
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258

• • • •

Identification & analyse tool
– Who influences who
Interest Predictability H H Clarity M L H Power & influence

Capture stakeholder interaction
– Influences, influenced by

Can record synergy and antagonism Often recorded in a stakeholder matrix
Interest H M L H Power & influence
Interest Predictability H H Clarity M L H Power & influence Interest Predictability H H Clarity M L H Power & influence

Change

Predictability H Clarity

Against Neutral For © Logical Model Ltd  +44 (0) 845 2 57 57 07

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258

Management Strategies
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259

• • • • •

Organise those pro the programme – Give them facts to promote the programme Use those pro the programme to convert the undecided Look-out for those with power or influence not on the radar Don’t inform those hostile to the programme Wake the sleepers – Don’t allow some stakeholders to realise late on that programme impact affects them, get them engage early

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259

Changing Stakeholders
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260

Stakeholders change over time – Stakeholder management process should be constantly identifying, analysing, planning, monitoring and controlling Programmes span the business over longish time periods – Likelihood that stakeholders will change during the programme – Promoted into or out of programme stakeholder group Be prepared with ‘induction pack’ – History, status, major tenets – Make time to listen to them carefully – Include into existing stakeholder analysis & management plans Understand new stakeholder’s perspectives – Day job versus programme interest (conduct and impact)
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260

Communication Flows
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261

• •

In: to support execution & management of the programme Out: to support governance of the programme – Broadcasting to the organisation to keep all affected but less involved stakeholders in contact with programme status
• Key success factor

Up: Decisions needed vs. authority limits – Status reports – Typical for upward flows to be wrong content
• Those steering should not get PM info

Down: Decisions made, directions given – Requirements – Typical for downward flows to be wrong content
• Those steering should not dispense technical dictates
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261

Communications Plan
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262

Successful projects have good communications – Good = Basis for decision making and assigning actions
? have ? ave ou h do y ou use? oy ls d What do they need to know e? too s too lsones to us to ns s cat o iicatiionwhiich one ch un Who tells them m t omm unsellect wh t c m ou hat c oo you se ec W ha d o y When W w d Ho w Ho How How many times & How often to repeat

Who Needs To Know •

Sponsor/ User provide goal, constraints external political view

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262

Programme Identity
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263

Programme participants are key stakeholders – Have their own WIIFM – Simultaneously watching the programme and their career in the line Successful programmes provide a sense of (tribal) identity Programme staff need something to bind them to outcome – Drafted from across differing business streams & loyalties – Sense of belonging, sense of purpose – Visibility to rest of the organization Brand-name & logo – Memorable (can be an acronym) – Encapsulate the product, impact or customer values of the programme – The mug, tea-shirt, pen, mouse-mat is not a waste of funds
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• •

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263

Programme Publicity
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264

Programmes should be publicised – Briefing sessions for important stakeholders (across organisations) – Broadcasts for the general employee base – In-house newspaper, intranet, posters in canteen and lifts, notice boards Include – Why the programme exists (link to strategy or business plan) – What business impact it will have (link to personal fears) – Major milestones in programme achievement (link to visibility) – When the impacts will start to be visible (link to rhythm of the business) – Answers audience’s fears uncertainties and doubts
• “What is in it for me?” (link to personal reasons for giving support)

– Show small wins on a frequent basis (ditto)
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Workshops for “Stepping into the future” and “Defining Quality Expectations”

From Goal To Deliverables

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265

Next: From Goal To Deliverables
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266

1. Breakdown Structure 2. Start With Products End with Tasks 3. PBS Example 4. Breakdown Structure Rules 5. Guidelines For Construction Of A PBS

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Breakdown Structure me o me c uttcoonss o cttion d o ulicensei(License@logicalmodel.net) removes this note: Please report unlicensed commercial use & share in fees levied Licensed for individual use without fee. re d A commercial e uiire be aac oicce e h oi eq u l rreq willl b a cch he el i e tthe vvel wavve a Change initiative s p iisom le lssh a o p t om le e l h T o t t evveNeed T ot le Outcome B o id--l (satisfied need) B M id M
BS BS Quality Quality
Functional Functional NonNonFunctional Functional Definition of all whole Definition of all whole programme/project scope programme/project scope

267

Specialist Specialist
Process Process Standards Standards Product Product Standards Standards

Management Management
Ditto Ditto

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267

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Start With Products End with Tasks

268

1st Step is Product (impact) breakdown structure – Allows agreement between change initiative & customer on WHAT 2nd Step is to identify expertise in HOW – Identify the tasks that create the outcomes – Product oriented work breakdown structure
• Not useful for team management in this grouping

3rd Re-group the elements as required for control – Organisational Breakdown for resourcing – Cost breakdown for financing & budgeting – Phase breakdown for schedules and timings • Same process for programme, project, phase or task

Design

Del1

Task

Fred

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268

Product Oriented WBS Example PBS
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269

w dow n ak reak do B re d B ente iientedre Or uct Ortructu re ct S tructu Prod u S Prod
1

Accounts System
2

f do sed of o se comp o omp Is c Is
3

4

Payables

Receivables

Statutory Reporting
2.3

Bank Reconciliation Central Bank
4.1 4.2

1.1

1.2

2.1

2.2

Pay Roll

Trade Creditors

Trade Debtors
2.1.1

Invoice Matching Aged Debtors

Supplier ML

3.1

Design Invoicing Design Invoicing

Invoicing

n ow kdow n ea k d ) Br ll) Br ea e ev e kL askL ev T as Made or Achieved by k ((T 2.1.2 Made or Achieved by or Wor k W
4.2.1 4.2.2 4.2.3

A/C Balances

Variance Report

2.1.2.1

2.1.2.2

2.1.2.3

Design

Build

Review

Design

Build

Review

Design Variance Design Variance Report Report

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Verb Model Ltd © Logical Verb Noun Noun

269

Breakdown Structure Rules
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270

Each level is exactly 100% of item above – No sequence is explicit within the diagram
• Although is often implied

Parent

• •

No 1-2-1 links – No Fan-in

P

ent

ar

Bottom level is labeled using verb-noun (Analyse Requirements) or noun-verb (Requirements analysed)
Invoice Bank Rec Payables

One

One
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Design

270

Guidelines For Construction Of A PBS
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271

1. Start with Goal and the customer/ users – Decompose the goal in-to (major) deliverables (external, persistent products) – Brainstorm all the products that must be produced to keep all the stakeholders happy
• • Probably done during the goal setting meeting Involvement key to creating ownership, belief and motivation

– Identifies the skills needed to conduct further planning

PBS  Project

Deliverable 1
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Deliverable 2
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Deliverable 3

Staff 271

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Breakdown structures, product descriptions and work-packages

From Deliverables To Activities

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272

Next: From Deliverables To Activities
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273

1. Deliverables 2. ALL The Products = ALL The Tasks 3. WBS 4. Guidelines For Construction Of A WBS 5. Here Be Monsters 6. Phase Oriented WBS Example 7. Organisational Breakdowns 8. WBS & Other BS 9. Breakdown Structure Guidelines

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273

Deliverables Business Context
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274

Company Context

Shareholder Directorate Need Competition Constraints PM

Benefits Stream

Pgm Team Functional Mgmt Operations 274 Staff Business Change PM PM

Project Plan, Reporting & Status

Team Leaders Project Team Leaders to project Project Plan, Team Status Reporting & Leaders The Team The Team © Logical Model Ltd  +44 (0) 845 2 57 57 07 The Team Projects Customer
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Regulators

Internal Deliverables

Deliverables

ALL The Products = ALL The Tasks
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275

• • •

Crucial first step – Identify all results: deliverable including project’s internal deliverables Include temporary or throw-away deliverables – Prototypes, mock-ups, test-rigs, stubs & drivers, scaffolding & jigs Include management and quality products – Progress reports, lessons learned & problem diagnosis – Risk and issue reviews, assumption analysis, communications plans, resource acquisition Work (i.e. Tasks) are derived from PBS Dictionary – Include specification of the Grade or Quality required

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275

WBS
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276

• •

Identifies the tasks to produce deliverables Structured as – Hierarchical decomposition – Indented list – WBS Dictionary key for Quality Criteria
t ucct od u d rrodnteed P e nt PBS  Project P ie Orri O

Deliverable 1

Deliverable 2 B or Wo F

Deliverable 3

orr W s o kks s © Logical Model Ltd  +44 (0) 845 2 57 57 07 Ta Ta s

A

H

D

I

L

E

rkk

K

G

J

C

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276

Guidelines For Construction Of A WBS
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277

2. Identify the tasks – May be a separate session – needs people with technical skills – Brainstorm the tasks required to produce deliverables
• Involvement key to creating ownership, belief and motivation

– Group the tasks - often requires moving from deliverable based view to responsibility (OBS) or lifecycle phase based view – Resolve placement of common tasks such as documentation, QA & reporting based on which BS view being taken
PBS  Project

Deliverable 1

Deliverable 2

Deliverable 3

A
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H

D

I

L
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E

B

F

K

G

J

C

277

Here Be Monsters
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278

Development of the WBS means identification of activities – Activities encompasses ALL those required to build the outcome PLUS – Check the outcome conforms to its product description – Correct non-conformances – Report on the status of results PLUS – Actions to prevent non-conformances or to capitalise on opportunities
• Threat and opportunity (aka Risk) management happens* while building the WBS

– ‘Plan A’ • • Also need to include within the WBS all activity that is dependant on a risk event – ‘Plan B’: only to be used if the linked risk (threat or opportunity) occurs When done right risk management is done here*

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* This is a part not the whole 278

Phase Oriented WBS Example
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279

do w reak do eak B d Br ente iientedure r t re eOr as O Struc Phas e Struc tu Ph
1

Accounts System
x.x.2

Grouped in time with Grouped in time with
x.x.3 x.x.4 x.x.5 x.x.6

Concept
1.1 1.2

Design

Build

Assemble

Review

Rework

Technology Search

Evaluation Criteria
3 2.1 1 2.2 2.3 4 3 2.1 1 2.2 2.3 4 1.1 1.2 4.1 4.2 1.1 1.2 4.1 4.2

Design Design Invoicing Invoicing
2.1.2 2.2 2.3

Build Variance Build Variance Report Report
2.4 2.5 4.2

All Review All Review Tasks Tasks Design Variance Design Variance Report Report
2.6.2

Receivables
2.1.2.1 2.1.2.2 1.1 1.2 4.2.1

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279

Organisational Breakdowns
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280

• •

Delegating responsibility for scope-of-outcome to project participants Resourcing perspective – An alternative, concurrent view of project scope – Who reports to who – Who takes direction from who Beware: If ALL communications follow the OBS then the project will fail through lack of communication – Communications maps best created with SIPOC or the Precedence network

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280

WBS & Other BS
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281

Each BS is a different perspective
Requirements Deliverable 3 A C C B F J

PBS Project Design D E K

In phase Responsible for
Build G H I L A B C D E F G H

Reports to

Analyst

PBS  Project

Deliverable 2

B F K G J

Programmer

OBS  Project

Design
Del1

Deliverable 1

D E

E

L

Pgmr

I J

I

Tester

A H

K L

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281

Breakdown Structure Guidelines
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• •

7 plus or minus 2 items wide Depth to reflect your level of control – IE the point at which you delegate responsibility for further detail – Probably 2-4 levels down – Chain of delegated authorities will result in conceptual, total programme BS being many levels deep

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• •

Constructing Network Diagrams Forward & backward passes, float and its significance

From Activities To Critical Path

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Next: From Activities To Critical Path
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284

1. Tasks In PDM/ Network Diagrams 2. Mechanics Of Critical Path Calculations (Finding where are our scheduling options) 3. Precedence Diagram Method 4. Calculating Float (Aka Slack) 5. Adding The Imposed Constraints 6. Calculating Dependencies 7. Just in Time

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Tasks In PDM/ Network Diagrams
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285

PBS  Project


Deliverable 3

Lowest level of WBS used in network model Programme’s building blocks are project phases, Project’s are work-packages Results in schedule

Deliverable 1

Deliverable 2


C

A

H

D

I

L

E

B

F

K

G

J

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285

Mechanics Of Critical Path Calculations
(Finding where are our scheduling options)
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286

Longest of all paths through the planning-packages – Shortest time to complete the work – Path with zero float/slack time Can be multiple parallel critical paths

Earliest Start = 0 5 0 0

5 5 0 7

5 6 5 7

11 Earliest Finish 11

11

Latest Start = 4
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11 Latest Finish
286

Precedence Diagram Method
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287

• Network diagram shows dependency & independence – What can or can’t be done concurrently – 1st pass ignores discretionary dependency such as resource limits or customary work practices • Dependencies are logical relationships – Cannot start until (depends upon) predecessor finishes (or starts) …. Task 2 cannot start until task 1 has finished – May start after… Task 2 may start (any time) after 1 has finished
Start

Task 1

Task 2 Task 4

Task 3

Finish

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287

Calculating Float (Aka Slack)
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288

• Float is flexibility – Network shows date options – Gantt shows date selections

Go our Y
TF =0 Critical Path 13 EF=18 G 5 18 13 LF=18 13 H 3 15 18 16

A 0 Dur = 3 LS=2 5 Total Float >0 0 5 B 5 0 5 © Logical Model Ltd  +44 (0) 845 2 57 57 07

ES=0

FF >0=TF 3 5 5 5

C 5

D 3 9

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FF =0=TF 10 10 13 E 3 10 10 13 FF=0 < TF(4) 8 8 11 F 3 12 12 15

288

Adding The Imposed Constraints
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289

When dates are imposed the network helps right to left planning – Conduct a forward pass – Set the end or mid-term milestones dates – Plan back from dates using a backward pass – Remove negative float by using project speed-up options

1 0 -3 1 A 1 -3 -2 -2 1 3
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4 B

5 -3 2 4 2 6

5 2 4 6

6 C

11 -3 8 11 6 2 8 8 2 F 13 -3 10 10!

3 D

2 E

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289

Calculating Dependencies
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290

Pour EF i Tea LF

ES Add j Milk LS
Create ES j Design ES +2wks FireEF j Watch LF

Finish-i permits start-j Normal Relationship

Start Early

Finish

ES Gather i Spec’tn LS EF Welding i LF

Start-i permits Start-j Late Commonly an optimisation of a more detailed underlying set of F-S relationships Finish-i permits Finish-j Rare. Usually end of monitoring activity Start-i permits Finish-j Rare. Usually handover on acceptance There is no timeline in a network diagram
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ESOps i Support ES
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EF Project j Fix-on-fail LF

290

Just in Time
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291

I am cooking Christmas dinner – Inspection suggests the turkey will be ready in 2hrs time – When should the par-boiled potatoes go in the oven to roast and so be ready for serving at the same time?
Cook the Turkey
F-S

– Scheduled to finish at Serving’s start Start = finish – duration Roast Spuds
Par-boil Spuds
F-S

Serve dinner
S-F

I’m receiving expensive, delicate equipment – It must be installed in a purpose built facility on arrival for its safety – Finance have insisted purchase is as late as possible
Prepare facility Deliver Kit ALAP
F-S F-F ALAP

Install Kit

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Determining Resources Needed To Achieve The Critical Path

From Critical Path To Resourced Schedule

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Next: From Critical Path To Resourced Schedule

293

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Network Diagram To Schedule Gantt Resourcing And Levelling Resource Gantt To Resource Histogram Using Scheduling Options Resource Levelling Bandwidth Analysis Crashing & Fast Tracking Management Analysis Cumulative Resources & Timing WBS + Resources & Dependencies = Schedule & Cumulative Cost & BAC Cash-Flow Cash-Flow Patterns
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293

Network Diagram To Schedule Gantt
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294

0 0


1 A

1 1 0 1 1 1 6

 
4 B 3 D
2 3 4

5 0 5 4 5 9

5 5 4 9

 
6 C 2 E
8 9

11 0 11 6 5 11 11 11


2 F
14 15

13 0 13

Period
Task A B C D E F Duration 1 4 6 3 2 2

1

5

6

7

10

11

12

13

1 2 1 2 1 2 1 1 1 1
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2 1 1 1 1 1 1

1

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294

Resourcing And Levelling
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295

• •

Applying resources to the “perfect schedule” normally results in unacceptable peaks and troughs of work Smoothing or levelling – Removing the peaks & troughs by using float (slack) – When float is insufficient to remove peaks and troughs the end date is moved to accommodate resource availability Resources are key constraint on most programmes – Task starts are delayed waiting for suitable resources – Change is Resource Constrained Programmes should focus on “bottle-neck” resources – Not necessary at programme level to level every resource, is at project level – PMs will escalate resourcing difficulties
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295

Resource Gantt To Resource Histogram
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Task Duration

296

Period
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

A B C D E F

1 4 6 3 2 2

1 A 2 2 B B 2 2 1 D D 1 1 1 1 1 1 1 1 1 1 1 1

Resource 3 Usage/ Period
2 1
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D E B B E B B C C C C C C
2 3 4 5 6 7 8 9 10 11
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F
12

F
13 14 15

Period 1

296

Using Scheduling Options
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297

• •

The first cut dependency model provides ‘best-case’ schedule – Only schedule determinants are those things that CANNOT be avoided Second cut adds the reality – Discretionary constraints whose resolution is “too painful” – EG Resource constraints, Accepted corporate ‘how we do it here’ – Established by the culture, context and Governance framework – Open to challenge via the OBS/ Roles & responsibilities framework Float (slack) defines the cheapest options to pay for reality Levelling is the process of reducing demand to the limit of capacity or increasing capacity to the level of aspiration – Assess the organisation’s band-width

• •

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297

Resource Levelling
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Task Duration

298

Period
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

A B C D E F

1 4 6 3 2 2

1 2 1 2 1 2 1 1 1 1 1 2 1 1 1 1 1 1

Resource 3 Usage/ Period
2 1
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Maximum of two resources available for this project

A

D D D E B B B B E B B B B C C C C C C
2 3 4 5 6 7 8 9 10 11
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F
12

F
13 14 15

Period 1

298

Bandwidth Analysis
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299

Assess demand & supply for key resources – >60 to 80% generally a problem

Resource Units

Res-1 Available Demand Res-2 Available Demand Res-3 Available Demand …

Jan Feb Mar Apr May… 30 20 40 40 40 20 20 20 20 20 10 10 10 10 10 6 8 10 12 10 2 3 3 3 4 0 1 1 1 3 88 86 84 78 78

Time
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299

Crashing & Fast Tracking
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300

• •

Use of float may be insufficient to achieve targets Tasks may be speeded up by adding resource to them – (normally) the addition of cost – Crashing Projects and programmes may be speeded up by relaxing dependencies – (normally) adds risk of finishing even later or of requiring greater crashing – Fast-tracking Speeding up change normally adds large amounts of concurrency – Concurrency is a driver for setting the appropriate control regime

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300

Management Analysis
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301

How much management does the programme need?

Different work profiles create differing management needs

ls? nt r o oontrols? tc ojec rroject c tp ffec aaffect p es rofil pprofiles hese ootthese wd Hoow d H

F-S -50%

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301

Cumulative Resources & Timing
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302

20

15

10

5 3 2 1 A 1

B B B B D D D E E B B B B C C C C C C F
2 3 4 5 6 7 8

F

D D D E B B B B E 1 A B B B B C C C C C C F 3 2
1 2 3 4 5 6 7 8

F

9 10 11 12 13 14 15
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9 10 11 12 13 14 15

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302

WBS + Resources & Dependencies = Schedule & Cumulative Cost & BAC
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303

st, ittwilllalllco st, a l co what i wil he lly we know whaale: whatttthe know c t Fina lly we Fina esscale: wha er wha tim ovverwhatt timeflow looksslike. . ke o hcassh-flow look li i e negattvve ca t al o b e nega i w musstalsso be u s lo ii ii e ca h-f l w m e possttvveca sh-fsoness Cassecan n The po i The Bu siness Ca cas he tthe Bu o modelled sso gful DCFssand NPV s odelled anin ul DCF and NPV m ai conttan me aningf con in me
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303

Cash-Flow
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304

Projects spend money continuously – Revenue expense (OpEx): once spent it is gone
• Shown in the Profit & Loss or Income & Expenditure • Salaries, consulting, travel, consumables

– Capital Expense (CapEx): Once spent leaves an asset behind
• Shown in the Balance Sheet and Asset Register

May earn money – Stage payments for projects from customer – Benefits from deliverables Out-flows and inflows equals cash-flow – Timing & volatility important to the finance/ treasury function – Must be discounted (DCF) for programmes run over the ‘longer term’
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304

Cash-Flow Patterns
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305

Programme may receive new money on periodic basis – May just be cross-charge of staff-hours

Common reality

Theory

Borrowing Req’t

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Estimating

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306

Next: Estimating
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307

1. 2. 3. 4. 5. 6. 7. 8. 9.

Nature of Estimate? Psychology Assignable Causes & Random Variation Three Parts To Any Estimate Achieving Accuracy Responses To Uncertainty Budgeting the Uncertain Budget Allocation Improved Estimates

10. Improving Precision Over Time 11. Define Levels Of Precision 12. Approaches And Techniques 13. Estimating Approaches 14. Top Down Versus Bottom Up 15. Estimating Techniques 16. Parametric Estimates 17. Analogous Estimates
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307

Nature of Estimate?
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308

• • • •

Different from a guess Lack of precision: fact. Lack of accuracy: incompetent Used for rationing & coordinating A collection of data, not a number – Comparison or formulae used to derive final quantities – Assumptions and sources of input values – Margins for error or tolerance – Scales upon which the estimate rests – Values on the scales (Minimum, Maximum, Median, Mode, Mean, Standard Deviation, Budget, Contingency (and finally!) Reserve)

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308

Psychology
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309

Student syndrome – When the time is “too long” what do we do? If I say 5 and I take 4? – If I say 5 and take 6? – I’ll say 6 and keep my mouth shut when it is 4 If you expect to start after me, on Wednesday & I’ve done my bit by COB Monday? If I don’t ask “are you on schedule?”?

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309

Assignable Causes & Random Variation
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310

• •

Actual results inexactly match estimates due to variances – Variances result from random cause or specific cause Sign your name 10 times – Imagine someone bumps into you on 1 signature – Risk/ contingency process should account for assignable causes

• Estimating basis & range must account for random variations
Upper Tolerance Limit

Out of tolerance
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310

Three Parts To Any Estimate
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311

3 Parts of a budget in any quantity (Time, money…) 1. That part derived from the core of the work to be done 2. That part allowed for as random variations natural to the process and product – May be possible to define cause & effect but we choose not to – Minor, often many in number both good and bad 3. That part allowed against specific causes of variation – Potential problems (& opportunities) that we can identify and assess probabilistically not deterministically – Risks! • Forth element may be reserves against unexpected – Can only be a guess
city Veloocity s / Vel ile ==Mile s / k M s o wr ttowoorkc-lightts h rive affi D i The D rive ±Trraffic-lig rrann he T ±T y duuetto a i nt e o d ++Delaay e to aaccde ntidayys Del du to cci ide ol da s e chool-h oli l y du ++Delaay ue toosschool-h De d 311 t up d--up due ee --Sppeed S

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Achieving Accuracy
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312

Estimates are uncertain but can be guaranteed accurate – Educate stakeholders to understand range & confidence – Educate stakeholders to understand continuous elaboration Promises (IE certainty) WILL include a premium for risk – Someone must make visible provision for uncertainty somewhere in the project’s baselines
• Hidden contingency cannot be managed and is habitually wasted • Make uncertainty explicit and place allowances under control

• •

Quote & justify the budget, the confidence level, the contingency provision and reserves separately Establish the process for refining estimates over time – Iterative application of techniques with feedback loops
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312

Responses To Uncertainty
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313

Tolerance allowances – An allowance for natural variations in process execution – When not cost effective to describe causes enough to be assignable – No cost-benefit from making process more capable Contingency budget – An allowance associated with restoring alignment between status and plan after an identified and assessed event becomes certain (funding ‘Plan B’) – Relates to an “assignable cause” – Only consumed* if the event occurs Change budget (philosophically just part of contingency) – An allowance for allocation against a modified plan – Funding for a new set of future intentions and / or new end point
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* In the case of the event being the trigger to an opportunity we may release resource313

Budgeting the Uncertain
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314

Allocated budget – What we know we know – The iceberg that sank the Titanic – Core work done or in progress plus contingency after a risk event is inevitable Unallocated budget – Things we know we do not know – If the iceberg could have been avoided (Between horizon & impact) – Core work not yet started, Contingency for ‘Plan B’ that might not be needed Reserves – Things we don’t know we don’t know – The iceberg before the Titanic was launched on her maiden voyage
Margin Reserve Rsve

Contract Price Contract Budget Baseline (CBB) Performance Measurement Baseline (PMB) Distributed Budget Distributed Budget UDB Distributed Budget Undistributed Budget Undistributed Budget
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Control Account Budgets Control Account Budgets Control Account Budgets

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Work packages Completed Work

Completed Work Packages P’kages Planning Packages Plan’g Work packages

314 Margin

Budget Allocation
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315

What we should budget is based on required confidence – Weighting normally 4 so # terms normally 6 E = (Best + 4ML + Worst) 6 80% = 50% + (Worst – Best) 6 95% = 50% + (Worst – Best) 3

50% or “expected” = ((Best + (Most likely * Weight) + Worst) / # terms)

e

When allocating the task give the minimum of ML & “e”

1SD
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6 SD

315

Improved Estimates
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316

• • •

Quality of estimate indicates natural variability of underlying process – Indicated by the ratio Contingency : Budget – 2 : 16 (1 in 8 or 12%) worse than 0.3 : 16 (1 in 50 or 2%) 1:10 or better*: 1st SD = +30% & 2nd SD = +15% Between 1:5 and 1:10 – 1st SD = +20%, 2nd SD = +10% Anything worse (1:3, 2:1 etc) requires return to the WBS to decompose the task – Likely the task includes a discrete risk that is distorting the estimates – Worth investing effort to improve estimate
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One SD

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12 13 14 15 16 17 18 19
* Better eg 1:20 or 1:100

316

Improving Precision Over Time
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317

• Range narrows & skew changes over time
D D eta es il ig ed n

e 1SD
Max

St ar tup P D reli es m ig in n ar y

At start-up

After design
Po st -f ac t

6 SD
Max Most Likely Min

Most Likely

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Cross-section at start-up

Min

time

Cross-Section @ Detailed Design

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Improvement over time 317

Define Levels Of Precision
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318

• Rough Order of Magnitude – Estimate must be interpreted as between upper and lower limits • Budgetary – Reduced range • Definitive – Final range

ROM

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hi i g e tthnng sam e m n he t i aantthe sa heirr e e ly m e E ms n y m AGRE ! h rrmsoonlif we AGRE E t e te e a nc e Thesse tveryyone if wn advvance! nd e e e r one h T to ve i in ad 40% aand e finittoons i i ns © Logical Model Ltd to s ± 0% de fini e ROM aas ±40% e se ROM 40 % d t ee 40 o + 400 u mi h s ooumigghtit ass--40tto + Y Y I see it a e

Estimate

time

318

Approaches And Techniques
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319

• •

Always use a combination to cross-validate 1 with another

Approach estimating either top down or bottom up – Cross-check one with the other • Generate the values using analogous and parametric techniques – Answers may be quick but rough or higher precision later • Gather data from all sources and pass to experts and verify with peer-groups – Qualify assumptions and detect biases • Always generate three point estimates – Optimistic, Pessimistic & Most frequently occurring – Calculate budget and confidence levels

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319

Estimating Approaches
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320

• •

Top-down: If it is £1m then…looks like 300k for B, OK? Bottom-up: Looks like B is … plus … plus…

£1m £400k
Deliverable A Deliverable B Component B.1 Project

£200k
Deliverable C

£100k
Deliverable D Component D.1

Component A.1 Component A.2 Component A.3
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£110k £125k £75k

Component C.1 Component C.2

Component B.2

Component B.3
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w St eakdo rreakdown rk B Component D.3 Component B Woork C.3 W

uct Strruct re nComponentuD.2

ur e

320

Top Down Versus Bottom Up
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321

Strengths and weaknesses with both • Top-down – Produced early – Often created by analogy with previous efforts
• Aided by estimating histories (Documented details of “last time”)

– Lacks precision, based on little concrete detail – Cheap, quick, simple, simplistic, • Bottom-up: Increased precision – Not available early in project – More expensive and time-consuming to create – Capable of greater precision – Project uncertainty based on uncertainty described per task
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321

Estimating Techniques
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322

Analogy – Extrapolation of previously observed results to a new situation – All estimating is analogous (otherwise it would be a guess!) – Identify similarities and differences between historical data and current context Parametric – An analogous estimate that uses a mathematical formula
• Leads to systematic errors – bad news • Easily fixed once detected – hardly good news  • Enabler for continuous improvement in estimating processes 

– Sometimes known as an estimating relationship – Research shows parametric models are more reliable than their creators!

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322

Parametric Estimates
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323

How long does it take to cook a chicken ?

What assumptions or facts are material to the estimate ?

How long does it take to analyse a requirement, design a galley, bore a 40mm hole through 20mm plate steel ?

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•Estimators

are not modest: if its huge they say so. Nor are they shy: if its tiny they say so

323

Analogous Estimates
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324

How long does it take to cook an ostrich ?

• •

How could we reduce our uncertainty ? How can we express our uncertainty ?

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•Estimators

do it in groups: top down and bottom up - PM Proverbs

324

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Preparing resource providers to be flexible enough to start early

Probabilistic Schedules

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Next: Probabilistic Schedules
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326

1. What Confidence Of 5 Weeks Parallel Tasks 2. Over-Allocating Contingency Serial Task 3. Confidence In Schedules 4. Reality & Simplicity 5. Calculating Contingency 6. Showing Schedule Contingency 7. Contingency 8. Monte-Carlo Analysis 9. Programme Critical Path 10. Adding Contingency 11. Showing Cost Contingency 12. Retiring Contingency 13. Base-lining
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326

What Confidence Of 5 Weeks Parallel Tasks
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327

• B=3 ML=5 W=7

Assuming even chances of each task duration then what is the probability of this project taking… – 3 weeks – / About % – 5 weeks – / About % – 7 weeks
– / About % There are 27 possible scenarios – About 4% each…

B=3 ML=5 W=7

B=3 ML=5 W=7

3,3,3 7,7,7

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327

Over-Allocating Contingency Serial Task
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328

What schedule is needed for the following (1/10 chance of the extremes)? – Task 1 Best estimate 1 day (1 in 10 chance), worst 99 days (1 in 10 chance) – Task 2 Best estimate 1 days, worst 99 days – Task 3 Best estimate 1 days, worst 99 days

t1 t1

t2 t2

t3 t3
1/ 1/ / chance chance chance

– 1d+1d+1d = 3d if EVERYTHING perfectly – 99d+99d+99d = 298d if EVERYTHING awful – (1d+99d)/2+(1d+99d)/2+(1d+99d)/2 = 50d+50d+50d = 150d

What is your confidence that 298 be required? Right budget then? – When would 150 be OK?
– What would be an acceptable level of commercial risk?
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328

Confidence In Schedules
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329

Each task B=1, ML=50, W=99, E=50, σ=16.7 – 50+50+50+16+16+16 is not 80% case! (ie only 1/5*1/5*1/5 chance) Will only need 16+16+16 in the 20% * 20% * 20% of cases – 20% * 20% * 20% = .8% or 1 / 125 – 198 is the 99.2% confidence t2 t2
SD =

t1 t1

t3 t3

√ SD12 + SD22 + SD32 = 27.7 329

150+28 = 80% confidence
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Reality & Simplicity
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330

7

14

18

26

0 A 1,4,6 0

1 4 6

1 4 6

3 6 8 6 7 9 8 10 12 B 2,3,6

D 4,7,11 8 15 7 10

G 4,4,4 15 19 17 27

J 7,8,10 19 27 27 29

4 1 4 6

5

8 5 8 10 6 9 11 8 11 13 C 4,5,7

E 3,3,4 14 17

H 8,10,15 17 27

L 2,2,2 27 29

5 8 10 11 13 15 14 16 18 16 17 16 6 9 11 12 14 16 15 16 19 18 19 19 8 11 13 14 16 18 18 19 21 20 21 23 20

25

• •

Project expected
4

Project sd

F I K 6,8,10 2,3,3 4,5,6 = ∑ ( e1 + e2 + e3 + e4……. 19 22 9 22 27 9 17 = √∑(sd1**2 + sd2**2 + sd3**2 + sd4**2 + …)
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330

Calculating Contingency
Licensed for individual use without fee. A commercial license (License@logicalmodel.net) removes this note: Please report unlicensed commercial use & share in fees levied Schedule Protection 0.69 Task A B C D E F G H I J K L Best 1.00 2.00 4.00 4.00 3.00 6.00 4.00 8.00 2.00 7.00 4.00 2.00 ML 4.00 3.00 5.00 7.00 3.00 8.00 4.00 10.00 3.00 8.00 5.00 2.00 Worst 6.00 6.00 7.00 11.00 4.00 10.00 4.00 15.00 3.00 10.00 6.00 2.00 e 3.83 3.33 5.17 7.17 3.17 8.00 4.00 10.50 2.83 8.17 5.00 2.00 E=63.17 CP=29.5
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SD 0.83 0.67 0.50 1.17 0.17 0.67

CP 1.00

Float

SD*SD 0.69 1.00 0.44 0.25 1.00 7.00 1.36 0.03 0.44 1.00

1.00

0.25

1.00

0.44

1.17 0.17 0.50 0.33 0.00

1.00 2.00 1.00 2.00 1.00 Effort & CP protection

1.36 0.03 0.25 0.11 0.00 2.23

1.36

0.00 1.66

Length of CP & Total Effort
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331

Showing Schedule Contingency
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332

D 4,7,11

G 4,4,4

J 7,8,10

Pros and Cons of Pros and Cons of showing contingency showing contingency explicitly? explicitly?

A 1,4,6

B 2,3,6

E 3,3,4

H 8,10,15

L 2,2,2

Contingency 1.66

C 4,5,7
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F 6,8,10

I 2,3,3
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K 4,5,6

332

Contingency
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333

Why aren’t they the same?

10 week project, 10 week project, 20% chance of 2 week delay 20% chance of 2 week delay

12 week project, 12 week project, 80% chance of 2 week acceleration 80% chance of 2 week acceleration
• Question to ask: “what is the determinate of the 10wk vs. 12wk?” – Statement to make: “Boss/ customer, If you were to…it would be different”
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333

Monte-Carlo Analysis
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334

Software tool to calculate probabilistic project duration

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334

Programme Critical Path
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335

Project critical paths contribute to programme critical path – Not the whole story: often resource as important as schedule – Programme critical path passes through projects where: – Outcomes are inter-dependant – Resource contention (skills, infrastructure, management time) – Sharing of processes & decisions Linking over process or over resources often justified in the name of efficiency – At the cost of effectiveness – Never(?) better (unless the programme actually loses the investment) – If the programme makes a return then effective but inefficient(¿) resource usage gets to market quicker and ROI repays inefficient costs

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335

Adding Contingency
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D 4,7,11 G 4,4,4 J 7,8,10

336


L 2,2,2

A 1,4,6

B 2,3,6

E 3,3,4

H 8,10,15

Contingency

Buffers protect critical chain from delays – Key capability is to be ready to start early
D 4,7,11 G 4,4,4 J 7,8,10

C 4,5,7

F 6,8,10

I 2,3,3

K 4,5,6

Why here? Why here?
D 4,7,11 G 4,4,4 J 7,8,10 A 1,4,6 B 2,3,6 E 3,3,4 H 8,10,15 L 2,2,2 A 1,4,6 B 2,3,6

E 3,3,4

H 8,10,15

L 2,2,2

Contingency

C 4,5,7

F 6,8,10

I 2,3,3

K 4,5,6

Contingency
C 4,5,7 F 6,8,10 I 2,3,3 K 4,5,6

D 4,7,11

G 4,4,4

J 7,8,10

A 1,4,6

B 2,3,6

E 3,3,4

H 8,10,15

L 2,2,2 D 4,7,11 G 4,4,4 J 7,8,10

C 4,5,7

F 6,8,10

I 2,3,3

K 4,5,6

A 1,4,6

B 2,3,6

E 3,3,4

H 8,10,15

L 2,2,2

Happy with this path? Happy with this path?
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C 4,5,7

F 6,8,10

I 2,3,3

K 4,5,6

??

336

Showing Cost Contingency
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337

3pt estimates for work yield expected cost / schedule and standard deviation – Sum costs , calculate project (or phase or path standard deviation) – Plot on cumulative cost curve
Tolerance?

Other Allowances & Reserve ∑£sd = √ (sd1**2 + sd2**2 + sd3**2 + …)
∑£e = ( e1 + e2 + e3 + e4…) or staff-days or any other quantity

Time SD

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337

Retiring Contingency
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338

%age contingency used or retired by value

Baseline + Contingency used

e en w hhen we w tails w cki i g l Deetaiostraacknng D t t o tr e gget t

Fear

Worst case Budget £/ Hrs 50% Budget
Hope

Best case (all opportunities)
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338

Base-lining
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339

When new wave of planning is nearing completion – Add risk management tasks & contingency arrangements – Test by asking “Do we believe the plan [is realistically achievable]?” Sign-off after plan has been tested and risk has been included – Two way commitment to combination of resource+approach+schedule+scope – Not changed in either direction without permission from authorised person

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339

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Complexity

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340

Next: Complexity
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341

1. Complex Projects Have to Be Lead 2. Actually We Don’t Know How To Manage Projects! 3. Simple vs. Complex 4. Systems 5. Stable vs. Unstable 6. Agents 7. Attractors 8. Emergence 9. Complexity

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341

Complex Projects Have to Be Lead
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342

Projects are amongst man-kind's most important endeavours – Projects routinely suffer poor performance of astronomic proportions – Problems stem from philosophy of a serially linked world where understanding is gained by reductionism – Inherent limitation of “understand the whole by knowledge of the bits” – Assumes “workers are replaceable cogs” add no local intelligence – Newtonian, Adam Smith, Descartes: Modern management principals Traditional, linear, cause-and-effect project approach fails as:… – Projects become unpredictable as the number of interactions increases and their quality decreases – Cause & effect leads to an explosion of details and feed-back loops – Project Managers disregard variables that are too hard to track
• Perception filters: deletion, distortion & generalisation*

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*Noam Chomsky Transformational Grammar 1957 342

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Actually We Don’t Know How To Manage Projects!

343

L Why do compex projects consistently become challenged? – What do Chaos and Complexity have to add to management by Reductionism and Control
Because we do not yet have the “right” answers to how to plan and manage projects in common use – What is in common use cannot be right Nurturing and perturb – Use local intelligence, parallel, distributed processing – Principal based not rule based freedoms within limits

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343

Simple vs. Complex
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344

Cause & effect Planning

Deterministic Goal+Deliverables = (complete) Statement of Work

Probabilistic G+D = evolving SOW Rolling Wave or Stages Quantitative may be hard Manage & Lead Command, monitor, replan Avoided

Pattern describable SOO & Constraints. Architectures Coordinate plans

No observable pattern Statement of Outcome (SOO). Hope Not possible Hang-on & Pray monitoring impossible ¿fun?

Measurement Control Style Control Best for

All quantitative Manage Command Implementation, Manufacture Efficient repetition

Qualitative Lead Attract & monitor, Governance Creativity, Design, R&D Novel solutions

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Simple

Complicated

Complex

344 Chaotic

Systems
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What is a system? – Interacting parts (agents) – Rule-set Inputs and outputs – Boundary – Open vs. closed – Feedback

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345

Stable vs. Unstable
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Equilibrium – Constant motion, Business as Usual – Today’s rule-set & agents as yesterday Disequilibrium – Accelerating or decelerating, change, flux – Today’s rule-set or agents not as yesterday – Linear & proportional or Non-linear, dis-proportional Adaptation – Agents inter-act via their rule-sets, rule-sets over-ride and combine – Self Organisation: stable or not – Emergence
• Stable new agent & rule-set mix
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? r ot oornnot ? rium m ui i qquliilbbriu ee n IIn

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346

Agents
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• •

Any decision making element of a system Interacts with adjoining agents – People & process, (wo) men & machines – How it interacts is its Rule-set Human rule-set has basic 3-way decision – Cooperation, competition, or exit Cooperation allows for – Development of team-work – Sharing perceptions – Synergies – Non-linear dynamics
• Compete also non-linear

• •

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347

Attractors
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• •

Attractors – The external(¿) influences on a system Point attractor – A single point: Results in a system in equilibrium without motion – Operations & BAU, simple project achieving delivery Cyclic attractor – Two (or a few) points (possibly of varying properties) – System in a repeating, predictable, dynamic, moving equilibrium – Pattern or rhythm: Weather, Market places, A project’s life-cycle Strange attractor – Creates change without discernable pattern – Point(s) of attraction or interactions not understood – Un-repeating change, “new-order of things”, “can’t put the genie back in the bottle” – Disease, war, some economies at some time – The complex project’s behaviour
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348

Emergence
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Emergence – Change in a system’s rule-set – Stable plus external force I.E attractors equals New stable
• Stability may emerge over time • Instability may be severe enough to destroy the system before new stability reached

Unintended consequences

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349

Complexity
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350

‘Complexity’ means agent interaction less describable – If many interactions or many rule-sets or unknown or… – More inter-action or integration the less linear the results – Chaos = “if there are rules I cannot see their effects” (not ‘no rules in action’) • Businesses have complexity – Highly integrated endeavours (project or business) more complex – Lots of interaction, lots of rules and lots of unknowns • Projects are especially prone to complexity, create it and use it! – Dis-equilibrium = change of rule-set in one (or more) agent(s)
• Integration of task and resource, over time & cost & quality/ scope

– A project is a rule-set by which an organisation changes agents & rule-sets – Creates emergence which is a blend of intended & unintended consequences
• Consequences filtered by incentives, tolerances, controls & decision making architecture
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350

351 Achieving return on investment requires Governance, Project planning, Tracking and escalated/ delegated decision making
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For further help & assistance – Assist@LogicalModel.Net

+44 (0) 84 52 57 57 07

Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project Risk and Quality Management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® Exam preparation & PRINCE2® use in the real-world – Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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Concepts in adaptive system’s behaviour

Complexity: Systems And Projects

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Next: Complexity: Systems And Projects
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353

1. Using Complexity 2. Gauging Rate Of Change 3. Guidelines for Design of Complex Project 4. Style 5. Harness the Agent’s Abilities 6. Leading Complex Projects 7. What’s In It For Me

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353

Using Complexity
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354

Complexity is NOT to be avoided at all costs – The Right Amount The degree of chaos is a variable to be controlled – What management challenges does it create? When is more better – Self-organisation & emergence are useful traits When is less better?

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354

Gauging Rate Of Change
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• •

Too little & too much are both bad How do you tell if there is too much/little – What are the symptoms? – Chaos-Confusion/ Failures/ Stress – Complacent/ Fire-fighting/ Poor Risk/ Low Energy Slack Progress

How do you change it – What are the benefits & risks – Energy, change, stretch, achievement, motivation – Unintended consequences, lose of familiar, dislocation, fear, doubt
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-eq q f diis-e ds eof s aus e o s a c au n ac g t iits , s q s-eq , ps de iign erable t Diis-ehellps de se tollerable n''t D q he s b to e is n s-e ng i Diis-eqge must be hang e st C ha D an ge mu C h n of-c ha te--of-c Ra te Ra

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Guidelines for Design of Complex Projects

356

Remove the choice “should we change?” • Replace with “now change is inevitable which direction should we go?” • How do you herd cats?

1. Recognize when self-organization and emergence are beneficial • Identify the ‘costs’ and impose suitable ‘budgets’ 2. Create the communications network • Product (result/ outcome) focus • Process (control/ governance) focus 3. Remove all rules expect the essential set • Errm what are the essentials? 4. Create fertile environment for emergence
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t rse i ours e c u of o es of c t on? y ((yes a t on?

s ) pend s does!!) end t de p it does de It I

Wh a Wh

356

, 357 hings , tttthings gh he i gh ht ttherrigs rigght o ri i i D o hi i hhpp== DDo tthnngs s rrs eade rs LLeadenageers== Do g Licensed for individual use without fee. A commercial license (License@logicalmodel.net) removes this note: Please report unlicensed commercial use & share in fees levied Maana M

Style

Leadership is crucial, management remains a mandatory element – Leadership tools are concerned with “connectivity” in the communications – Vary the mix of leadership and management • Leaders – Set direction, Align people, Motivate – Statement of outcome contracts – Encourage adaptive behaviour • Managers – Plan and budget, Organize and staff, Control and solve problems – Statement of Work contracts • Both set limits on acceptable variation (Tolerance)
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357

Harness the Agent’s Abilities
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358

Projects contain multiple variables – Exceeds our ability to exercise span-of-control and unity of command
• Cause & effect (command & control) management of limited usefulness

Projects gather intelligent “agents” – Give the agents some (pre-defined) level of autonomy
• Commanders intent, Statement of Outcome

– Make time “deep” instead of long
• Parallel and distributed working

Principals of Complex Adaptive Systems – New insights add to project management not replace it

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358

Leading Complex Projects
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• •

Understanding the business success criteria – No other reason for undertaking a project Honest, straight-forward communications are best – Not always politically acceptable – Part of project cost: when too great ensures project ‘failure’ Plan back-ward from the desired end-point – Plan in the team SOO  intended actions Reward initiative: right attractors Learn from mistakes – This project’s and every prior one’s Remove the choice to change – Leave the choice of what is the change
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• • • •

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359

What’s In It For Me
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• •

How do you achieve change of rule-set? – Light a fire, explode a bomb-shell, be a corporate hurricane Before/ once the choice is removed now what ? – Be very sure the end-point is clear to all: Vision: attractive, alluring – Monitor the emergence achieved for unintended consequences Co-locate people’s thinking (if not their bodies) – Remove barriers and add facilitators to free-form communication – Use the agent’s intelligence and pull of the attractors to define “how”
• How is the plan: return to tradition management of projects to achieve the plan

People’s attractors – Trigger change and encourage outcomes: desirable or not – Governance detects and kills off undesirable consequences, accentuates the desirable

Triggering change is (may be) unpredictable –  +44 (0) 845 2 57 57 07 the desired goal is correct leadership © Logical Model LtdFocussing agent activity on © Logical Model Ltd

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Creating the communications network

Communications in The Complex Project

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Next: Communications in The Complex Project
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362

1. Communicating In Complex Projects 2. Quality of Connection 3. Continuum Of Project Complexity 4. The Right Comms 5. Connections not Content 6. Communications Flows

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362

Communicating In Complex Projects
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363

Essential to have a communications and decision making architecture – Simple projects use spoke & hub communications – The hub is a bottle-neck that stops complex projects functioning What is the purpose of an architecture – Interfaces, segmentation – Drawbacks? What elements do we need in a decision making architecture

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363

Quality of Connection
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364

What makes great quality programme communications? – Agents who can benefit from some information know that info
• Timely for decision making

– Signal to noise ratio high IE Agents not swamped by extraneous info • • • • • Language & culture Feed-back loops Time, care, will Speed, accuracy, completeness, integrity, availability, confidentiality Richness, serendipity, combinations

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364

Continuum Of Project Complexity
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365

Potentially increasing number of connections

Complex

Required Cnxtn Poor & Missing

Centralised (spoke & hub) comms NOT possible

Inc. quality of Conxtn

Poor Cnxtn

Centralised comms hard: Possible if important enough

Complicated

Many conections working quiet well Few connections or Interconnects work very well

Simple Small
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Communications are mapped & routed centrally

Big
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Global
365

The Right Comms
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366

Communications is key: in detail that means – Flexible and open “useful to know” not “need to know” – Collaboration not control, Guiding principals not rules, Support not dictation, Circular, parallel and cross-linked not serial and filtered – Ironically good “free-form communications” must be well planned to be achieved Planning great communications – Who communicates – What information do they need or might use – What information can they supply – When do they get it – How do they get it, format – How often do they get it, repetition
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366

Connections not Content
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367

• •

Creates the pipe-work to connect speakers and listeners Leave those who are connected free to determine the content – Design information is different from control information – Both are needed The edge of chaos is not an excuse to remove good controls – Recognition that control is not enough on its own – Control comes 2nd (after there is something to be controlled)

What pipes are required – What is their content?

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367

Mission

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& Values

Communications Flows
How: Strategy How: Strategy Escalate decisions outside authority Report, Seek Guidance

368

Why Why What Vision What Vision

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Cascade intent & constraints Delegated Authorities & Tolerances (freedoms)

Business Business Design (Modus Design (Modus Operandi) Operandi)

What Strategy What Strategy

Programme Design Programme Design (Architectures) (Architectures)

How: Goals How: Goals

What Goal What Goal

Project Design (Planning) Project Design (Planning)

How: Tasks How: Tasks

What Tasks What Tasks

Technical Solution Design Technical Solution Design and execution and execution
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Impacts Impacts

368

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Measuring Complexity

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Next: Measuring Complexity
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370

1. Defining and Measuring Complexity 2. Simon’s Manageability Index 3. To Quantify Complexity 4. When 5. Adjust The System

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370

Defining and Measuring Complexity
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371

Complexity can be qualified (quantified?) – A relative measure – Allows formulation of actions to change complexity
• Complexity can increase or decrease • It is useful to be able to manage the complexity

First step to building a measurement tool – Isolating the drivers of complexity – Measure the interactions and their quality
• Many interactions, poor quality—higher complexity • Few interactions, great quality—lower complexity

– Consequences of communications – Speed of communications vs. speed of rule-set change

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371

Simon’s Manageability Index
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372

Purpose Purpose Goals Goals Resources Resources Schedule Schedule Technology Technology Process Process Resources Resources Organisation Organisation Customer Customer Decisions Decisions Decision making Decision making Team Team

0 0 Clear Clear Stable Stable Adequate Adequate Flexible Flexible Familiar Familiar Well known Well known Dedicated Dedicated Project Project One One Swift Swift In Team In Team Collocated Collocated

10 10 UnClear UnClear Changing Changing Scarce Scarce inFlexible inFlexible Unfamiliar Unfamiliar Un Tried Un Tried Shared Shared Matrix Matrix Many Many Slow Slow Out with Team Out with Team Distributed Distributed TOTAL TOTAL

Score Score _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ ______ ______

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372

To Quantify Complexity
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373

Collect data about potential & existing:… – Agents – Inter-connections – Factors that increase, decrease, enhance, block, diminish, amplify, muffle, distort, corrupt, speed, slow, combine or in any other wise affect interconnections Number of, timeliness of, completeness of (understanding), %age relevant etc

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373

When
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374

At predicted (scheduled) points: milestone – Project or subproject selection – Vendor or contractor selection – Start of each phase including closeout – Periodically when no other trigger

Research Extend Infrastructure Product
O pe

Research Build Infrastructure Build product

ra

tio

Research

st ab ilit y Deploy to business

na l

Build product Research Build product Deploy to business Train people

Product

Train

O pe

Cutover
ra tio na l

st ab

Cutover op

ilit

y

Q1

Q2

Q3

Q4

Q1

Q2

At (predicted?) un-scheduled points: Events – Any step in the life-cycle of any risk occurrences – Re-planning – Stakeholder changes

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374

Adjust The System
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375

If too much chaos then create order (delivery to plan) – Work to plan – Impose processes and formalize decision making – Reduce information flows – Reduce discretion If too little inspiration create chaos (designing solutions) – Encourage circulation of problems, information and expertise – Remind people of the “What” not the “How” – Provide a challenge to be overcome – Provide rewards for self-organization and emergence Governance – Tolerance, freedoms, authorities, limits
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375

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Business, Programme & Project Adding, linking and deleting projects in the programme

Control Of Change

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Next: Control Of Change
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377

1. The Only Constant Is Change 2. Change Management 3. Programme Change Management 4. Nature Of Change 5. Process 6. Request For Change Contents

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377

The Only Constant Is Change
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378

Projects & programmes must adapt as the world changes or they are useless – Uncontrolled change is a project killer – In commercial circles contract = fixed costs, change = profit – Control of change is difficult, expensive, unwelcome, vital • Change is ANYTIME we are different from the baseline WHATEVER the cause • Change is assessed for impact on the baselines – Impact analysis IS planning & should be conducted the same way – Resource & schedule impacts need 2ndry & tertiary interdependencies verified • CM is not MoC: Management of change is process by which programme deliverables are introduced into the line – Part of communications

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378

Change Management
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• •

Key is to match significance to the architectures Decision architecture says HOW to decide/ WHOSE authority decides fate of a change – Co-ordinate change approval across all project managers Technical architecture establishes interfaces to limit the spreading ripples from change – Changes to interfaces need all providers / receivers aware of change
• Establish Interfaces Control Groups for major interfaces • Interface owner is receiver when multiple senders, sender when broadcasting

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379

Programme Change Management
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380

Tool for incorporating evolving needs into the project set – Projects cancelled or initiated – Products (features) delivered, added or dropped – When programme budget is a capped amount change control is about rationing within resources already allocated
• Project change management generally adds budget (or releases reserve) into the project

Possible new baseline is assess for stakeholder’s revised utility (benefit vs. cost assessment of before & after change scenario) – WIIFM now? – Affect on designs thus complexity & controls & plans & thus management – The ROI, the schedule, the total spend, impacts as seen by each stakeholder – Impacts on contracts, staff (business and programme)
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380

Nature Of Change
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381

Baseline is the “Originally approved scope plus or minus approved changes” The customer can have what they are prepared to pay for – “I want more, for free” is unrealistic and unprofessional – “I need the project to deliver to new CSFs, what are the consequences?” is mature and real-world Triggers of change ?

Customer Funded

Spec’ftn errors

WIBNI

Supplier Funded

Exec’tn errors

How about if we…

Mandatory Discretionary

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381

Process
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382

• •

Change control is minor(¿) planning on “what if” basis Applied to programme, project or team plan

ID [&Sanity filter]

Assess Impact (What if…) Just planning

Decide Value vs. Costs & Write-off

Do (plan) Reject Defer Escalate

Close

Record details

Record details

Inform stakeholders
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Request For Change Contents
Licensed for individual use without fee. A commercial license (License@logicalmodel.net) removes this note: Please report unlicensed commercial use & share in fees levied • • ID, date, person raising, and contact details Description of change requested Justification, reason and benefits (i.e. business case impact) – – Impact of not action-ing change Timescale or other drivers and constraints – Items affected – Impact description (BENEFITS & Risk, scope & quality, schedule, costs, reputation…) – Impacts/ Products & Interfaces/ Outcomes plus Work-Packages/ Projects – Resource impacts, Control and Project Management affects – Linked RAID records Decision making – Relevant authority – Decision made, date – Appeal status Action log – Actions taken, plans revised, items changed – Implementation state – Sign-offs (All impacted parties task and product interest, Originator) – Closure details

383

RFC RF oe Doe Cddoe n Doe ' ssha ssntth a ve hav t ' hav e toc veett b o o o e ve cov r o befo eraal rma l llth form l, e theba al, bas s se es

RAID Ltd Risks,57Assumptions, Issues & Dependencies = +44 (0) 845 2 57 07 © Logical Model
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383

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384

For further help & assistance – Assist@LogicalModel.Net

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Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project Risk and Quality Management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® Exam preparation & PRINCE2® use in the real-world – Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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384

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Governance Is Plan + Status = Steering Decision

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Next: Governance Is Plan + Status = Steering Decision

386

1. What Is Governance 2. Internal Control 3. COSO Effective Internal Controls 4. Two Models For Assessing Control 5. KPIs & KGIs

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386

What Is Governance
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387

“2.5 …governance is the system by which [companies] are directed and controlled. [Boards of] directors. … responsibilities … include setting the … strategic aims, providing the leadership to put them into effect, supervising the management of the [business] … subject to laws, regulations and the shareholders …” – The Cadbury Report – 1992

“… holding the balance between economic and social goals and between individual and communal goals. The [corporate] governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society" – Sir Adrian Cadbury in 'Global Corporate Governance Forum', World Bank, 2000

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387

Internal Control
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388

Internal control is a process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: – Effectiveness and efficiency of operations – Reliability of financial reporting – Compliance with applicable laws and regulations Key Concepts – Internal control is a process. It is a means to an end, not an end in itself. – Internal control is effected by people. It’s not merely policy manuals and forms, but people at every level of an organization. – Internal control can be expected to provide only reasonable assurance, not absolute assurance, to an entity’s management and board. – Internal control is geared to the achievement of objectives in one or more separate but overlapping categories.
The Committee of Sponsoring Organizations of the Treadway Commission

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388

COSO Effective Internal Controls
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389

The COSO report’s five interrelated components for effective internal controls: 1. Control environment. – The tone set by management’s style & philosophy. For example in assigning authority and responsibility; and the level of oversight provided by the board of directors. Factors include integrity and competence, ethical values and are a reference point for interpretation of controls Risk assessment. – Risk from all sources is identified, and analysed for probability & impact on the achievement of a objectives as a basis for selecting management responses. Procedures should address the dynamics of the companies situation. Control activities. – The policies and procedures that ensure management’s responses to risks to objectives that are present at all levels of the operation are implemented. Controls cover authorising, verifying, and segregating duties, reconciling & reviews security and performance. Information and communication. – Information is identified, captured and communicated to enable staff to carry out their responsibilities. Systems deal with a 2 way, 360 degree flows of internally generated data, & external events or conditions for sound decision-making & reporting. All participants understand their role in the internal control system, and its relationship to the work of others. Monitoring – Control systems are monitored to assess the system’s performance via ongoing management and supervisory activities & separate evaluations whose scope and frequency depend on external regulations, internal standards & their effectiveness and assessment of risks. Deficiencies in internal control are reported.
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2.

3.

4.

5.

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389

Two Models For Assessing Control
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390

Plan Strategic Tactical Administrative

Do

Check Report Report

Correct Asset Valuation Vulnerability Assessment
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Threat Assessment Risk Assessment Action Plan

Counter Measures Control Evaluation Residual 390 Risk

See CobiT® Process PO9 Assess Risk

KPIs & KGIs
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391

Key Goal Indicators – Lagging indicator* – Measures performance versus target or goal – “Measures that tell management—after the fact—whether a process has achieved its business requirements” Key Performance Indicators – Leading indicator – Measures enablers of the process or goal – “Measures how well the process is performing in enabling the goal” – Measures of “how well” a process is performing EG: Service delivery goal is 100% availability between 8am and 8pm – Actual achievement is 96% due to incident number 12345 EG Continuous service delivery is enabled by testing all changes before installation – Number of tests per implemented change was 17 this month up from 12

• •

CobiT® 3rd Edition Audit Guidelines July 2000. p.6 & Management Guidelines p.17
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Note: This is the opposite way around from Kaplan & Norton’s “The Balanced Scorecard”

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Current Plan As Selected Route Across The Landscape

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Next: Current Plan As Selected Route Across The Landscape

393

1. Planning Draws The Map 2. What Happens In Execution? 3. Execution & Delivery 3 Distinct Themes 4. Tests For A Current Plan

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393

Planning Draws The Map
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394

•• Route across the map changes as needs Route across the map changes as needs dictate dictate
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394

What Happens In Execution?
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395

• • •

Carrying out the work by the team – Project execution, Project & Programme control Measuring progress versus plan by the PM Handling variations – Change the route to the goal – Project? Programme (Delivery Manager)? – Programme Sponsor / Director ? Execution is constant re-planning – Hopefully on a the micro level

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Execution & Delivery 3 Distinct Themes

396

Handling Issues, RFC

Escalating Issues & reporting status

Planning for exceptions or next stage

All OK? (Ac Wh

Update Project Plan
case

H

Execution & Delivery
Minor Adjust’ts PM’s daily monitor & review

Review Business Case & Risk Log

Clo
Ask Permission to Continue

Authorise, track & receive completed work Do the work
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Accept new work & Team Planning
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Hand over the products

Build

Test

Implement 396

Tests For A Current Plan
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397

• •

As the real world changes so must real world plans – Plans must be current to be useful! What does a “plan” contain, how do I know it is “current”? – The objective, the means of control, ALL “who does what & when details”
Tests are:… – The team know the contents – All un-started tasks have a start date in the future – Progress on critical tasks (schedule, cost or resource) is within tolerance
• Progress on all tasks is within tolerance

– Resource assignments over the short term are specific and practical
• Medium & long term resourcing maybe generic but is still practical

– External dependencies are reconfirmed with all parties

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Gantt charts, milestones and variances

Tracking And Reporting Progress

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398

Next: Tracking And Reporting Progress
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399

1. Assessing Status: The PM’s Day-job 2. Appropriate Reactions To Status 3. Gathering Status Data 4. Progress Report Template 5. Gathering Tracking Data 6. Financial Tracking 7. Problem Visibility 8. When To Respond

9. When To Re-plan 10. Contingency in Schedule 11. Contingency in Action 12. Minimum Measurement 13. Good Metrics 14. BRAGGing 15. Escalations 16. Escalation 17. Handling Escalations

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399

Assessing Status: The PM’s Day-job
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400

• •

Results achieved means products* (from PBS) produced – Certainty of achievement comes from the quality control activities Hours spent/ resources consumed mostly useless – Useful to verify or correct estimating models if combined with results achieved – Otherwise only of interest to accountants and historians Tasks performed (is not achievement, but…) – Used to congratulate team members, generate morale and demonstrate momentum Key question “What is ‘to go’?”
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* Outcome/ Impact/ Results 400

Appropriate Reactions To Status
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401

• • •

Confirm results (from quality records) are to schedule Check resource projections match available resource pool – Add to relevant agendas as early as mismatch is suspected Use status data, quality control and audit results to plot best course forward – Note hot-spots for further scrutiny and support
• Share learnings, coach and mentor weakest performers

– Each day is a chance to set a better course (or a worse one) – Spread best practice and eradicate weakest processes • Take maximum advantage of windfalls – Natural tendency is for losses to accumulate & gains to dissipate – Apply effort to reverse the trend

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401

Gathering Status Data
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402

Impact/ Outcome focus

Sponsor
Highlight Report

Traffic Lights Graphs & Trend Lines Gantt & EVM Compiled tables & reports

Product focus

Project Project Progress Project Progress Monitoring
Checkpoint Checkpoint Report Checkpoint Report Report

Only Only measures measures of of any any merit merit are are those those

Progress Monitoring Monitoring Checkpoint Checkpoint Report Checkpoint Report Report

DIRECTLY DIRECTLY
related related to to the the

Activity focus
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Raw data Quality, Time & Resources

DELIVERABLES DELIVERABLES
402

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Progress Report Template
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403

•• Items for escalation and management support Items for escalation and management support •• Items not carried out to plan Items not carried out to plan •• Current status and progress achieved Current status and progress achieved •• Activity planned for next period Activity planned for next period

•• Items for escalation and management Items for escalation and management support support •• Items not carried out (within float/ tolerance) Items not carried out (within float/ tolerance) •• Current status and progress achieved Current status and progress achieved •• Activity planned for next period Activity planned for next period
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403

Gathering Tracking Data
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404

Progress reports must be based on quality control records – Timesheets required for time recording/ resource costings
• Record by team and roll-up in plans

Gather ETC: what we assess as of today is still to spend – Estimate To Complete is not (original budget minus cost to date) – Always re-estimate based on last 4 weeks actuals* Financial Records – Invoices received (or generated), salary bill, cross-charges – Often a lag while invoices pass through accounts payable or receivable – If costing is critical then institute a “this month’s data” process with-in the programme – Use Finance’s Management Accounts plus “this month’s” to determine week by week status
Compare past month actuals to plan for a ‘multiplier’ to apply to next month EG CPI & SPI 404
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Financial Tracking
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405

3 budget axis – OBS: manpower needed by function – PBS: Cost to produce a product (or outcome) – CBS: How it is shown in the accounts • General ledger codes (CBS) generally able to roll-up costs in a variety of ways – Draft a finance person into the programme during initiation – If possible rotate them every few months (Ambassadors of the programme) • Matrix organisations need matching accounting structures – Departmental budget should covers day-to-day department cost – Costs (income) attributed to the programme should be broken down • Not unusual for organisations to treat salary as central charge allocated pro-rata or not applied to programme

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Organisation Breakdown Structure, Cost BS, Product BS405

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Problem Visibility
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406

Programme manager and PMO (internal) – Look for trends in and across programme’s projects – Identify systematic and ad-hoc variations • Be prepared to express problem to business: Know the facts – Programme problems often widely visible: you’ll get stopped in a corridor and… – Have a recommendation/proposed action (or two) prepared if possible • Never say (or practice) “Don’t bring me problems without solutions” – Encourage early exposure of problems: solutions are a bonus • Be clear about when a problem (in tolerance) becomes an issue (out of tolerance) – IE RAG turns from Amber to Red

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406

When To Respond
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407

When project progress reports show:… • • • Problems common across projects Possible impact to programme critical success factors Project manager – Has an issue – Asks for help – Reports inconsistently with previous reports or other projects – Is unaware of programme wide repercussions of actions Any time perception of the programme is damaged – Stakeholder management – Perceptions do not have to be true or fair to cause damage (Politics)

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407

When To Re-plan
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408

Every day: little & often – Based on monitoring of external & internal context (Communications Plan) Re-plan may be due to – Sponsor demand/ Change of objective – Supplier failures/ Alternative solution – Change to any constraint outside of delegated authority (§Tolerances) – External dependencies dictate – Risk event invokes ‘Plan B’

Project Management LifeCycle Project Management LifeCycle Execution && Execution Control Control Tracking Tracking Quality Quality Control Control

Acceptance Acceptance

Clo Clo

RePlanning RePlanning Quality Assurance Quality Assurance

• •

When predictable that the plan will not meet any CSF Team morale is rock-bottom: Death march projects
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408

Contingency in Schedule
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409

Plan ‘A’
Phase
Task Task Task Task Phase Task Task Task Phase Task Task Task

Best case delivery date

Plans ‘B’
Contingency 1
Task Task Task Task Contingency 2 Task Task Task

Worst case delivery date

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409

Contingency in Action
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410

Plan “A”
Phase
Task Task Task Task Phase Task Task Task Phase Task Task Task

Old Best case delivery date

New Best case

Plans “B”
Contingency 1
Task Task Task Task Contingency 2 Task Task Task

Worst case delivery date

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410

Minimum Measurement
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411

Gathering progress information is a cost – Only gather where you will use the information – Challenge and remove metrics with poor value Use = a decisions is based on the data now or in the future – Precise & timely enough to make decisions while options still exist
• The minimum but no less: excess data, speed or precision is wasteful

– Meaningful comparison to goals & plans for variance analysis – Highlights gains and losses, preferably when still threat & opportunity • Support “What if” speculation to formulate new plans – EG EVA’s Cost Performance Index predicts Estimate At Completion from Budget At Completion minus Earned Value – EAC = (AC +(BAC-EV)/CPI)
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411

Good Metrics
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412

Cheap to collect – By-product of the work itself – Eg: Confirmation of deliverable passing QC equals milestone achieved or Number of tests still to run, fix back-log Gather metrics that can be – Automated – Assessed objectively – Independently assessed by several people if subjective (AKA a Review) Allow anyone and encourage everyone to challenge metrics – Treat metrics as guilty of being irrelevant unless proven innocent (useful)

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412

BRAGGing
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413

Blue Red Amber Green Grey (B)RAGG for focus areas – A tool to draw attention to areas needing deeper study • Programme assigns status to key indicators – Blue: Done – Red: Area reporting lacks either insight to design a solution or authority to execute – next management level up must resolve – Amber: Area reporting are focussed on containing a situation that has potential to go red – Green: Area reporting operating entirely within tolerance with no anticipation of amber status – Grey: Not yet applicable (eliminates Green where inappropriate*) • Data underlying RAG required for diagnosis – Set objective criteria based on tolerance levels to select RAG – May vary by product, project, stage of project etc

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*

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10 Green and 1 Red looks very different from 1 Red 1 Green and 8 Grey

413

Escalations
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414

• Problem: an off-plan state* within limits of authority to address without escalation • Should be notified upward

Issue: off plan state that is outside authority limits to address

• Early warning: raising a threat or opportunity to a management level before they are required to act
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* Either has happened without warning or warning signs suggest is going to be a fact414

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Escalation
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415

• • •

Don’t escalate (or allow escalation) through status reporting – Status report documents what was already escalated in person Only escalate issues (IE beyond my authority to resolve) – Flag-up risks while managing them: avoid “bolt from the blue issues” Flag-up amber risks* & problems with recommendations where possible – Never delay threat, opportunity or failure to search for an answer – Summarise the issue briefly, state the decision required and timescales – Make fair representation of competing view-points
• Bring other interested parties along with you if useful to them (and you!) • Pre-agree a solution for ratification if possible

– Have the facts to hand to provide complete expansion on any aspect

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*

Opportunity or threat 415

Handling Escalations
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416

Address escalated issues immediately – Take or empower actions – Relax a constraint – Escalate further Address escalated risks as dictated by their expected value – All risk responses should be in ‘Plan A’ or ‘Plan B’
• Plan A includes preventative and probability focussed measures • Plan B includes contingent, impact mitigations

– All threats add to programme costs & schedule
• Triggered threats require implementation of ‘Plan B’ (or ‘C’ or ‘D’)

– Sponsor owns the whole set of impacts and all impact choices

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416

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• •

Agenda, purposes and conduct Attendees and their obligations

Steering Committees

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417

Next: Steering Committees
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418

1. Steering Meetings 2. Control Flows 3. Reporting Cycles

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418

Steering Meetings
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419

Communication between project, programme and directorate – Is the business vision still as it was last time – Are products still right to achieve the vision – Are the benefits still safe – What is the current status of strategic risk and serious tactical risk – Are there any programme issues Include agenda items for – Current status against plan – Items for escalation or on the radar – Risks acceptance vs. response – Change to any of the key drivers in the programme’s context

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419

Control Flows
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Scope, Cost & Benefits

420

Senior Business Strategy
Strategy & Cross Business Issues

Management Project Board
Highlight Report Scope & Budget R&I Escalation
tracking

Programme Plan • Functional Project Plan Goals &
Deliverables Functional Goals & •Deliverables Goals Schedule Assignments • •Schedule Goals & Financial Goals • Assignments & •Financial Goals Quality Goals • Quality Goals •
Requirements & Testing Approval

Business Coordination (Heads of Function)
Direction
Direction

Issues

Checkpoint ETCs Risks

Requirements & Testing Activity

Operational and
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Supervisory Staff

Subcontractor

420

Reporting Cycles
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421

Steering Committee & Business Strategy

Consideration of meeting pack Background actions re Decisions Required.

Monthly Steering Meeting
•Tracked Progress & (re)Scheduling •Change •Risks

Consideration of Major issues. Raising of strategy issues.

Prepare for Steering Meeting, publish meeting pack
Project Manager & Business CoOrdination

Minute & publish Steering Committee

Cascade Steering Committee results to team

Weekly Project Meeting: Current Status, Required re-planning for Issues, Actions re Risks. Up-Coming milestones. Apply report of work done to plan. Apply ETCs to plan. Move all dates that have past expected forward. Assess and protect Critical Path status. Direct staff to up-coming tasks Report on work done, both scheduled & unscheduled. Report ETCs, report risks to milestone dates & issues. Estimate impact of requested changes, review intra and inter project deliverables
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Team

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421

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Keeping things on track

Measurement Analysis And Correction

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422

Next: Measurement Analysis And Correction
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423

• •

Analysing Measurements Recognising Value Earned

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423

Analysing Measurements
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424

Compare plan vs. actuals – Variance = Plan – Actual – %V = Variance / Plan Response to variances – Significant? – Systematic? – Capitalise on advances Amend the scope, the cost, the tasks, the schedule, the resources, the risks, the…

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424

Recognising Value Earned
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425

Activity is not achievement – Knowing achievement is the pay-off from quality and acceptance planning

Cumulative baselined expenditure

BAC
Actual expenditure to date

d nishe iinished ef f e hav e hav  We W 

Status? Status?

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Reporting and forecasting with earned value and its cousins

Where Are We, Where Will We Be?

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426

Next: Where Are We, Where Will We Be?
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427

1. Recognising Progress 2. Ways of Recognising Value 3. Simple Project 4. Budget at Completion Planned Value 5. Graphing EV Data 6. Taking Stock 7. The Colleagues 8. Taking Stock 9. Graphing EV Data

1. EAC Realism 2. EVM Formulae 3. EV Types in MSP 4. PV Based on Earning Curve 5. BCWS Based on Cost Curve 6. CPI/ SPI Chart 7. EV and Change Control 8. Milestone Status - Slip Chart 9. Milestone Accomplishments

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427

Recognising Progress
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428

• • • •

True measure of progress achieved is often hard – Hardest for tasks with intellectual content Tasks that are objectively measurable can use %Complete – 999 bricks laid out of 1000 Otherwise “If it isn't finished we’ve made no progress” is safest Compromise: milestone based capping – Pre-Design review = Maximum claimable is 15% – Pre-Development review = Maximum claimable is 45% – Pre-Integration review = Maximum claimable is 65% – Pre-System test = Maximum claimable is 75% – Pre-User acceptance demonstration = 90%
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428

Ways of Recognising Value
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429

Recognising earned value is easy when the task is complete – Judging value earned from incomplete tasks is troublesome Scope verification activities in product description are key enabler – Quality control records are key status data Use and appropriate EV type – Introduces timing variances in EV

0% 50 20

100 100% in one period 50 50% per two periods 80 Pro-rata Only at milestone 100% % with limits at milestones

20% 10 40

60% 50

Passage of time (Level of effort) Any of above Apportioned

Review points
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429

Simple Project
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430

You are working on the venues work-stream in this years Edinburgh fringe programme You're task is to engage 100 venues for assignment to artists – Your project manager has given you 10 weeks to get them signed up – You must visit each one, write & get printed a description to allow performers to match their needs to venue size/ price/ free slots – You have a budget of £100 per venue to cover the visit plus drafting and printing its description Three hundred are needed in total – Your colleagues also have 100 each to hire in the next 10 weeks

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430

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Budget at Completion Planned Value
BAC Planned Value (PMB)

431

10k 9k 8k 7k 6k 5k 4k 3k 2k 1k

Weeks
0 1 2 3 4 5
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6

7

8

9

10

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431

Graphing EV Data
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432

10k BAC 9k 8k 500 7k 6k 5k 4k 3k 2k 1k 0 1 2 3 4 Achieved Venues (Earned Value) 5 6 7 8
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1k

Under achieve

Overspend

Planned Value (PMB)

0

1

2

Spent ! Actual Cost

Week 1 Week 1 Venues planned: 10 Venues planned: 10 Costs: £800 Costs: £800 Venues achieved: 6 Venues achieved: 6
Weeks
9 10

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432

Taking Stock
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433

How far off target are you? – Achieved (Earned) 6 but planned 10, Variance = 4 behind time
• EV – PV = SV £600 – £1,000 = -£400 • EV – AC = CV £600 – £800 = -£200 Negative variances are  Negative variances still bad

– Achieved 6 at cost allowed for 8 = £200 over budget • What is your efficiency ? – Done 6 but scheduled 10, so only 60% of expectation
• EV / PV = SPI £600 / £1,000 = 60% • EV / AC = CPI £600 / £800 = 75% Less than 100% is 

– Achieved 6 at cost of 8 so 75% efficient or 33% over budget • Where will we end-up? – What is to be done / efficiency = 10wks / 60% = 16.6 weeks – What is to be done / efficiency = 10k / 75% = £133k
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433

The Colleagues
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434

How about your colleagues? They have managed – Done 12 so EV = ______ and spent 900 so AC = ____
• • • • • • • • EV – PV = SV EV – AC = CV EV / PV = SPI EV / AC = CPI EV – PV = SV EV – AC = CV EV / PV = SPI EV / AC = CPI / / / / = = = = = = = =

– Done 8 so the EV = _____ and Spent 800 in the process so AC = ____

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434

Taking Stock
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435

• Week 5 – Achieved (Earned) = 40 venues (£4k), Planned = 50, Cost = 6k
• • • • SV = EV – PV CV = EV – AC SPI = EV / PV CPI = EV / AC £4k – 5k £4k – 6k £4k / 5k £4k / 6k = -£1k = -£2k = 80% = 66%

• Have variances been systematic or one-off ? – If one-off Estimate at Completion (EAC) (Original efficiency factor) = £6k + 60 venues or 6k to go = 12k – If systematic EAC = 6k + 6k / 0.67 = £6k + 9K 15k
• Historic empirical cost efficiency factor

=

– Or worst case EAC (Compound historic factors) © Logical Model Ltd17.25k 2 57 57 07  +44 (0) 845

= 6k + 6k / (0.8 * 0.67) = 6k + 6k/.533 = 6k + 11.25k

=

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435

Graphing EV Data
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436

£k
17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 0

Week 5 PV: 50 venues = £5k AC: £6k EV: 40 venues = £4k Remaining 60 venues
BCWS Curve (PMB) BAC

EAC CS EAC CPI EAC (PM declared) VAC

AC curve SV

CV EV curve

Weeks
7 8 9 10 11 12 13 14 15

1

2

3

4

5

6
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436

EAC Realism
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437

• EAC-CPI and EAC-CS have been shown to indicate probably range for cost at completion* Range of £ – If more than 15% of project completed Forecast
• Unlikely to improve beyond BAC / EAC-CPI • Unlikely to be worse than EAC-CS
EACs Project Managers EAC BAC

– At 20% completed

• How well do we have to do to finish on budget? – To Complete Performance Index (TCPI) = Work left / Budget left
– Achieved (Earned) = 40 venues (£4k), Planned = 50, Cost = 6k – Planned – Achieved = 100 – 40 = 60 or £6k 6k work = 150% compared to – Planned – Cost = 10k – 6k = £4k 4k budget current CPI of 66%

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*Nearly a 1000 projects run by US DOD over several decade 437

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EVM Formulae
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438

• • • • • • • • •• •• •• •• •• •• •• •• •• •• ••

Cost Variance (CV) Cost Variance (CV) Cost Performance Index (CPI) Cost Performance Index (CPI) Cost Variance% (CV%) Cost Variance% (CV%) Schedule Variance (SV) Schedule Variance (SV) Schedule Performance Index (SPI) Schedule Performance Index (SPI) Schedule Variance% (SV%) Schedule Variance% (SV%) Budgeted Cost of Work Remaining (BCWR) Budgeted Cost of Work Remaining (BCWR) Budget remaining (BR) Budget remaining (BR) Estimate to Complete-CPI (ETC-CPI) Estimate to Complete-CPI (ETC-CPI) Estimate to Complete-CS (ETC-CS) Estimate to Complete-CS (ETC-CS) Estimate at Completion (one-off variance) Estimate at Completion (one-off variance) To Complete Performance Index (TCPI) To Complete Performance Index (TCPI) Estimate at Completion-CPI EAC-CPI Estimate at Completion-CPI EAC-CPI (Systematic) (Systematic) Estimate at Completion-CPI EAC-CS Estimate at Completion-CPI EAC-CS (Systematic & pessimistic) (Systematic & pessimistic) Variance at Completion VAC Variance at Completion VAC

= EV -- AC = EV AC = EV // AC = EV AC = CV // EV = CV EV = EV -- PV = EV PV = EV // PV = EV PV = SV // PV = SV PV = BAC – EV = BAC – EV = BAC – AC = BAC – AC = BCWR // CPI = BCWR CPI = BCWR // (CPI * SPI) = BCWR (CPI * SPI) = AC + BCWR = AC + BCWR = BCWR // BR = BCWR BR = AC + ETC-CPI = AC + ETC-CPI = AC + ETC-CS = AC + ETC-CS = BAC – EAC* either 1-off, CPI or CS or others are in use = BAC – EAC* either 1-off, CPI or CS or others are in use

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438

EV Types in MSP
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439

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439

Problem with EV Types
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440

Imagine the following simple project – Task 1 BCWS £1k payable per week back-loaded – EV Type 50-50, Duration 4 Weeks Graph the BCWS and BCWP and ACWP assuming everything runs to plan – Conclusions? Money
4k 3k 2k 1k 0k Time

Wk-1 Wk-2 Wk-3 Wk-4
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440

CPI/ SPI Chart
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446

Schedule Performance Index (SPI)
CPI > 1, SPI < 1 Under spent and late CPI > 1, SPI > 1 Under spent and early

Cost Performance Index (CPI)
CPI < 1, SPI < 1 Over spent and late

1
CPI < 1, SPI > 1 Over spent and early

1

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446

EV and Change Control
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447

2nd Change

TIME NOW

CONTRACT CHANGE

CONTRACT TARGET COST

CONTRACT CHANGE

Baseline

CONTRACT COMPLETION DATE

£

1st Change

Time
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447

Milestone Status - Slip Chart
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Dec 05

448

Milestone delivery date (slippage)

Nov 05 Oct 05 Sep 05 Aug 05 Jul 05 Jun 05 May 05 Apr 05 Mar 05 Feb 05 Jan 05 Dec 04 Nov 04 Oct 04 Sep 04 Oct 04 Jan 05 Feb 05 Apr 05 Jun 05 Jul 05 Dec 05 Jan 06 Sep 04 Nov 04 Dec 04 Mar 05 Mar 05 Aug 05 Sep 05 Oct 05 Nov 05

Key
Event A Event B Event C Event D Event E Current reporting period

Reporting period
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448

Milestone Accomplishments
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449

50 40 30 20 10 0
Previous prelim. design found to be suitable Bad weather

Jan

Feb

Mar

Apr
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May

Jun

Jul

Aug

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449

To implement EV the key factor is understanding how to judge “done” or percent complete: LML can help
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450

For further help & assistance – Assist@LogicalModel.Net

+44 (0) 84 52 57 57 07

Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project Risk and Quality Management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® Exam preparation & PRINCE2® use in the real-world – Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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The corporate and the personal learning cycle

Learning From Experience

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451

Next: Learning From Experience
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452

1. Learning From Experience 2. More Than I Can Say 3. Knowledge Cycle 4. Tacit & Explicit Knowledge 5. When (Sh/C)ould You ? 6. When LL Techniques Are Applied 7. Learning 8. The LfE Business Case 9. Applying The Course’s Messages 10. Programme End-point Is BAU

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452

Learning From Experience
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453

What is Lessons Learned (LL)/ Learning from Experience? – Seeing something right or wrong – Making it more or less likely to be repeated Process for cycling explicit knowledge to implicit (tacit) – Codifying, testing and refinement of “how we do it here” – LL is the conscious transfer of good practices between people in the organisation – Using the transfer process to meet the goal of improved performance Blame storms are common & wrong – A lessons learned review meeting with the wrong idea about what LL is actually all about

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453

More Than I Can Say
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454

Tell me how to ride a bicycle

Not falling off a bicycle – r~v2/a – To compensate for a given angle of imbalance (a), we must take a curve, radius (r), on the side of the imbalance, proportional to the square of the velocity (v) over the imbalance

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454

Knowledge Cycle
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455

Pr ac Be tic st es

To Tacit
Fluency: learning on the job Fluency: learning on the job through socialising e.g. “Sit with through socialising e.g. “Sit with Mary" & practicing Mary" & practicing

Explicit
Externalisation: essential & most Externalisation: essential & most difficult e.g. creating a procedure, difficult e.g. creating a procedure, defining a job role, giving a defining a job role, giving a presentation presentation

From Explicit

Tacit

Internalisation: building new Internalisation: building new observations e.g. by discussing & observations e.g. by discussing & exercising the capability exercising the capability
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Combining: adding to what IIknow Combining: adding to what know to fill a need e.g. by training to fill a need e.g. by training

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The value of education is not learning of many facts but the training of the mind to think something that cannot be learned from textbooks - Einstein.

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Tacit & Explicit Knowledge
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Tacit (Implicit ) • Riding a bicycle & securing a corporate decision Accountancy and C++ !

Explicit • • • Accountancy or C++ Project management (defined processes) Anything proceduralised – Methodologies Securing a corporate decision

Lacks vocabulary & models – Cannot be passed on
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‘Codified’ for transmission – Has “jargon” or formal language – Cannot be used “from the book”

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When (Sh/C)ould You ?
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457

• • •

Effective LL is not bolted-on to projects – It is integral process : Learning as we experience So when do you do it ? – Are there right or best times ? Ad-hoc, event driven – When you’ve something important to share, Eg a discovery is made – When starting something important (phase and project starts) – When a product is finished (phase ends and project ends) Frequently, regularly, routinely – Monthly or quarterly PM community meetings – What about:- at weekly team or monthly steering meetings?

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Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning - Einstein

When LL Techniques Are Applied
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Executing

Create new experiences

Planning Activity Initiating Controlling Closing

Use the Lessons Learned
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Time
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Analyse the experiences

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Learning
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• •

Creating new knowledge through lessons learnt Requires time and opportunity – Observing what happened – Reflecting on it – Drawing conclusions – Producing learnable lessons – Consolidate to future practice  Watch tacit knowledge in action  Translate to explicit  Merge / transform current explicit  Convey explicit  Translate to implicit

Different learning styles suit different personalities – Make contributions in different parts of the learning cycle

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The only thing that interferes with my learning is my education - Einstein

The LfE Business Case
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LfE benefits: Mitigate decision risk – Broader repertoire of response to contexts and environment
• Efficiency with the familiar and lower risk with the unfamiliar • Transformation of the unfamiliar to the familiar

– Day-to-day make the right and avoid the wrong decisions • Costs – Shift of focus: tacit understanding of benefits from reflection & sharing – Sponsorship, time, communications infrastructure – Loss of personal leverage for the intuitive high performers Rewarding those who try will encourage more – Success is not guaranteed but on average it is more common than failure – Don’t reward inaction, Don’t reward the guilty
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Applying The Course’s Messages
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461

• • • •

To ourselves, our bosses, peers, customer’s and reports What will you do? How? When?

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Applying the Course’s Messages
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462

• •

Without personal disequilibrium – No change, no gain, no pain I expect (hope) that you think you understood what you perceived I might have said, but I’m also sure you realise that what you heard may not have been what I did say. Plus what I said may not have been what I meant while it may still result in you having understood what you needed to have gained from listening. What do you think? Your real learning will come from Reflecting, Conceptualising & Experimenting

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Applying the Course’s Messages
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463

Action plan – Define your vision, goals & outcomes, programme & projects – Draw-up a list of course based outcomes that are attractive to your group Everything you need to do is in the course materials

Feelings? Optimistic?, Excited about/ depressed by?

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Programme End-point Is BAU
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464

Recognising programme end – When is the end of what you’ve started – What is BAU after the course ?

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There are other free sources of our value-add on our web-site www.logicalmodel.net
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For further help & assistance – Assist@LogicalModel.Net

+44 (0) 84 52 57 57 07

Consultancy & training in – Basic structured project management – Tools and techniques for advanced project & programme management – Leading complex projects – Recovery of struggling projects – Creating & running PMOs – Project Risk and Quality Management – Using Earned Value Analysis – Board briefings on project control & governance
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Continued… – Dimension Four® Benefits Realisation Method training and consultancy – PRINCE2® Exam preparation & PRINCE2® use in the real-world – Implementing IT Governance using the CobiT® Framework – Implementing Benefits Realisation & Lessons Learned processes

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