white paper series

Review and Recover Troubled Projects
The PMO’s Role in Managing Project Turnarounds

pmsolutions white paper series | p 800.983.0388 | pmsolutions.com | ©2008 Project Management Solutions, Inc. All rights reserved.

That means that nearly half of an organization’s projects are at risk of failure which puts both the business and jobs in jeopardy if nothing is done to mitigate the risks. During that time these organizations will realize that $30 million of their projects are at risk of failing. » » 2 . or poorly communicated Requirements that are unclear. What is encouraging is that by taking a proactive. the leading causes contributing to project failure include: » » Expectations that are too high. contradictory. According to new findings by the Center for Business Practices (CBP). they are successful 80% of the time. ambiguous. far less information exists on what organizations can do to avert failure in the first place. or poor resource planning Planning that is based on insufficient data.Review and Recover Troubled Projects WHAT’S AT STAKE: The statistics regarding project failure are sobering. According to the CBP. insufficient details. and recovering them before they fail completely. missing items. not managed. identifying the projects that are in trouble. or poor estimates. resource conflicts. or there is a lack of agreement on these requirements A lack of resources. In fact. comprehensive approach of reviewing their existing projects. organizations can avoid these kinds of crippling losses. unrealistic. either with the projects recovered and completed successfully (in 43% of organizations) or by setting new project expectations and meeting those new requirements successfully (in 37% of organizations). research shows that when organizations take actions to recover troubled projects. Sadly enough. most organizations do not have a standard approach or process for troubled project identification and recovery. organizations on average manage $65 million in projects each year. however. turnover of key resources. While a good deal of press coverage and research has been focused on project failures and the high costs they entail. or imprecise.

These screening criteria should comprise a balanced set of measures for evaluating and identifying troubled projects. schedule. 3 . Quality Issues – the number of defects. Scope Change – the number of approved scope changes exceeds a given threshold Work Effort – the number of actual hours is exceeding budgeted hours by a significant percentage. including financial. In almost every case.983.0388 | pmsolutions. Schedule Milestones – there are significant gaps (greater than 5% over plan) between planned and actual milestone dates or completed deliverables. technical and business alignment measures. The most common symptoms of troubled projects include: » » » » Critical issues in meeting milestones or completing deliverables High risk of not delivering anticipated benefits Resources are not fully allocated to the project The project is forecasted to be unacceptably behind schedule at the anticipated date of completion. All rights reserved. Customer Relationship – the project team has a poor working relationship with the customer and/or the working relationship is rapidly declining.Review and Recover Troubled Projects What Defines a Troubled Project. By implementing a comprehensive review and recovery process. the screening criteria may be applied to only larger or more critical projects within the organization’s portfolio.com | ©2008 Project Management Solutions. The use of these criteria may also be incorporated into the organization’s project portfolio review and reporting processes. Organizations must then establish a set of evaluation criteria to assist in screening projects for potential review and recovery activities. and use this screening technique to identify the subset of projects that will be targeted for further review and recovery activities. pmsolutions white paper series | p 800. staffing. Inc. errors. Using a set of established criteria in a standardized approach to evaluating projects helps to make the categorization of troubled projects an objective activity. a troubled project exhibits classic warning signs. and How Can Organizations Recognize One? A troubled project can be defined as a project that exhibits at least one of the following criteria (plus or minus acceptable variances): » » » » Project exceeds the estimated budget Project is behind the estimated schedule Project is not meeting expected requirements Project’s overall quality is unacceptable Defining the attributes of a troubled project is the first step in establishing a process for assessing and recovering projects. or review issues are critical and/or significantly growing during the project lifecycle. » Early detection is the key to success. For organizations with limited review and recovery resources. Organizations may wish to apply the screening criteria to all projects in their portfolio. and/or is consistently behind its planned schedule There are critical and/or significantly growing technical issues with the project Essential Criteria for Detecting Troubled Projects Financial Risk – the project is expected to exceed the budget at completion by more than 10%. or no established milestone dates. organizations can identify and take corrective action early in the project lifecycle and avoid costly losses and failure.

For example. 5. Identifying potential problems early in the project lifecycle requires continuous monitoring by the project sponsor. and timing for the project reviews. strategic importance. an additional prioritization may be necessary based on overall project performance. governance structure. and span of control can vary by organization. If the number of projects for potential review exceeds the resources of the PMO. a review may be done following initial planning activities to ensure the quality and completeness of those activities prior to committing additional resources to the project. The list may also include projects that have been added because they have exhibited some behavior that triggers further review by the PMO. and/or management discretion. an over-budget trend. 4. 6.Review and Recover Troubled Projects Project Review: Earlier is Better Traditionally. and close communication with the individual project managers. risks. 3. project steering committee and PMO. reviews must be conducted as early in the project lifecycle as possible to minimize the impact of future issues. The list of projects slated for review should be compiled by the PMO. or risks that are continually not addressed. and Methodologies PM Tools Training Direct Management of Projects Consulting and Mentoring Project Review and Recovery A project review and recovery process should be a part of the PMO’s functions to apply a consistent approach to evaluating projects whose outcomes have impact on the organization as a whole. According to 2007 CBP research on The State of the PMO. nominated by the project manager or project’s customer. The function. 2. This list may include projects that are nominated by management or the project sponsors. Standards. In some cases the PMO may also select projects for review at different stages of the project lifecycle to provide additional support to the organization and to provide a second “gate” for review. reviews are conducted as part of the project closing activities to capture lessons learned from the project. but typical PMO and SPO functions include: 1. Implementing a project review and recovery process that is administered by the PMO can help organizations recover the projects by applying sound project management practices in a focused and coherent manner. In order to prevent a failed project. criteria. an organization’s PMO may establish the review procedures. These “trigger points” may include consistent failure to meet schedule milestones. Project Controls Processes. Ideally. urgency. though. 4 . 7. or in some cases. These reviews may be recommended by the project’s steering committee or sponsor who typically monitors progress and is cognizant of potential issues. this role is common among mature enterprise-level PMOs. Managing the Recovery Process: The Role of the PMO An organization’s Project Management Office (PMO) or enterprise-wide Strategic Project Office (SPO) typically functions in a number of important ways to improve and standardize project management practices across the organization.

This approach should include a process for recovering the troubled projects and for capturing lessons learned and process improvement knowledge. continuing through to planning and execution of the project recovery.983.0388 | pmsolutions.Review and Recover Troubled Projects The Project Review and Recovery Process Model An organization’s PMO should develop an operational approach to monitoring the portfolio of projects and selecting projects for review and possible intervention. PM Solutions recommends a 5-step model that has been used effectively in assessing and recovering projects. pmsolutions white paper series | p 800. To aid in developing the optimum approach. 5 .com | ©2008 Project Management Solutions. and ending with a closing process. Inc. All rights reserved. The process incorporates a project management approach beginning with an initiation step or process.

steering committee. and professional approach. Again – a critical consideration in reviewing projects is the need to identify the projects for review as early in the project lifecycle as possible. accurate. The outcome of the Project Review is a formal report of the findings which addresses project management processes and performance across all the PMBOK® Guide knowledge areas – project strengths. A key success factor for reviewing a troubled project is conducting interviews with the project team. or have the project team implement the recommendations from the report. findings are submitted as a formal project review report to the PMO and project team. The assessor works with the project team. sponsors. opportunities and threats – and provides short-term and longer-term improvement recommendations. The PMO and/or designated steering committee can decide to continue the project without changes. and other stakeholders to objectively review the project and make improvement recommendations using an objective. Early intervention optimizes the opportunity for a full recovery and minimizes the costs associated with poor project execution. or PMO may select projects for review based on the established set of criteria. and other stakeholders to document any project issues and to identify weakness or deficiencies in PM practices. the project manager and review team document the decision and plan the activities associated with execution of the decision. In any of these scenarios. In some cases. Once the project is selected for review. The PMO should staff PM mentors or coaches that may provide this type of service or seek outside experts with the necessary skills and objectivity to review their projects. The review process also requires the examination of project artifacts. the PMO assigns an assessor to work with the project team in assessing the project management processes and reviewing the performance of the project team. Step 2: Project Review Project Review involves the formal assessment of the project. the assessor(s) conduct a formal review of the project using a set of standard questions aligned with project management best practices and PMI’s PMBOK® Guide knowledge areas. At the conclusion of this step. sponsor. customer. In this step. Other options could involve additional intervention by a recovery team to implement the improvement recommendations. weaknesses. The assessor should be an experienced project manager with good interpersonal and analytical skills. management. 6 . as well as a review of the project team’s actual performance on the project. concise. The use of a defined set of questions and scorecard helps to standardize the process and highlight areas that are in need of improvement. the project management team and/or steering committee may decide to cancel the project at this point.Review and Recover Troubled Projects Step 1: Project Selection for Review The project sponsor. based on the current status and the perceived value of the project.

such as improving team interaction and communication. recovery team. how best to implement the project recovery plan. 7 . This decision should include an assessment of the project’s current value and the incremental costs to complete the project. developing an effective approach for communicating with management or the customer. schedule. and the resource requirements for the remainder of the project. testing. approval and signoffs. It may also include recommendations for improving activities associated with the softer-side of project management. the recovery and project teams develop a recovery plan. Swapping out resources in this case may be a win/win for both the new project team and the original members. All rights reserved. The project recovery planning should address this issue and make appropriate recommendations to dedicate resources to the troubled project. cost. pmsolutions white paper series | p 800.0388 | pmsolutions. In this project recovery planning step.Review and Recover Troubled Projects Possible Decisions Based on the Project Review » » » » » » » » » Let the project continue (as is) Cancel the project Direct the project manager and team to implement improvement recommendations Revise delivery dates Revise budgets Reduce scope Add more resources to accomplish more work Add or change resources to bring in new skills Increase the level of work through overtime Step 3: Project Recovery Planning Assuming a positive decision to continue the project. and risk monitoring. status reporting. At this point it is also important to consider a crucial problem that plagues many organizations – the lack of dedicated resources. Inc. another decision point is reached to determine if the project should terminate or continue. scope management and change control.com | ©2008 Project Management Solutions.983. or other activities associated with the personal interaction side of project management. and customer satisfaction/quality considerations. cost. At the completion of the project recovery planning activities. project recovery planning may involve recommending changes in the project team to reduce tensions or to bring in resources with different skill sets. Less-than-critical objectives and requirements should be prioritized and considered for inclusion based on schedule. the team leading the project recovery planning works with the project manager and project team to identify the critical objectives and requirements that must be satisfied to complete the project. including but not limited to communication activities. Using the project review report. and if it continues. the recovery plan should address the organization of the project team. and resource management. the next step involves the development of a project recovery plan. In a significant number of cases. The recovery plan is an action-oriented plan which typically includes recommended changes to project management processes. motivating the team. Additionally.

Documenting and communicating the lessons learned. In some cases this may be accomplished by integrating the recovery activities with the original project activities. and making those best practices available across the organization via the PMO. and project sponsor/steering committee. In either case. defined change control process. so that one integrated plan can be used for implementing and monitoring progress. as well as for future project management practices in general. In some cases. and if recovery specialist is not a designated role within the PMO. The project manager. Executing the project recovery plan typically requires much more focus by the project team and the recovery team than executing a normal project plan. Recovering a project often requires outside help in the form of mentors and coaches. using standard PM tools such as a WBS. project team. the project team needs to work under a heightened sense of awareness while: » » Managing all work efforts and resources with a higher level of control Proactively communicating status and managing expectations » » » Resolving issues quickly and clearly Ensuring that the right resources are available at the right times Focusing on the minimum requirements necessary to meet business needs while keeping scope change requests to an absolute minimum Passing all scope change requests through the formal scope change process » Step 5: Project Recovery Postmortem Capturing lessons learned from the project review and/or recovery is important for improving the project review and recovery process. The project recovery specialist is generally experienced in turning around projects. In this recovery mode. To improve PM processes the PMO should allocate resources to help improve practices or should contract resources that can provide PM expertise and mentoring to improve the organizational PM processes. Mentors and coaches can help the project team implement the recommended improvements by providing consultation on the use of PM tools and techniques. experienced. an external resource can be contracted as needed to provide objective. as well as any specialists need to understand the current status of the project and recognize the critical nature of the project recovery plan. or recovery specialists.Review and Recover Troubled Projects Step 4: Recovering the Project Project recovery involves implementing the recovery plan and monitoring and controlling the project using standard PM processes. or for the remaining duration of the project. and risk management processes are key in recovering the project. In other cases it may involve creating an entirely new plan. and focused support for the project. 8 . This failure may be attributed to shortages in time and staff for both day-to-day project management activities and process improvement initiatives. a recovery specialist is needed to lead the project recovery activities until the project is back on track. Important information gathered in the project recovery postmortem includes answers to the following: » » » » » Was the recovery implemented successfully? Was the recovery implemented in a timely manner? How long did the recovery effort take? What went well in the recovery efforts and what failed to show positive results? What can we learn from the efforts to apply to other projects? Organizations often fail to implement lessons learned across their enterprise. This review helps to evaluate the success of the project review and recovery efforts and can help tailor future interventions. helps other projects avoid similar pitfalls.

All rights reserved. The process of planning for a recovery involves the project and recovery teams working closely to develop an updated plan. Working closely with the organization’s PMO. and risk planning on the project. Case Study: Project Review and Recovery As part of an organizational project management improvement initiative. the review/recovery team should continually gauge the stakeholders’ satisfaction level. and the use of sound status reporting activities. duration. and the changing customer requirements. the project team completed the project using a mature set of project management processes. the Project Management Office (PMO) of a leading consumer products corporation wanted to establish a project recovery process and pilot the process on a critical IT project that was experiencing a number of quality and schedule issues.com | ©2008 Project Management Solutions. change control. However. Additionally.0388 | pmsolutions. pmsolutions white paper series | p 800. frequent communication of all types. it can take just weeks to implement the project review phase and to make recommendations for improvement. the use of a simple stakeholder satisfaction survey at regular intervals during the project recovery period can help to gauge the current level of satisfaction. PM Solutions‘ recovery specialists developed a standard review and recovery process tailored to their operating environment. Following implementation of the recovery recommendations. This standard approach should include a set of questions that can be tailored by the assessor to help identify project issues. Project Stakeholder Satisfaction Because managing stakeholder expectations and satisfaction is critical for successfully recovering a project. The pilot implementation of the process on this high-visibility IT project identified deficiencies in the planning activities for the project. reviewing the plan with the steering committee/sponsor. The project review was conducted over a two-week period and led to changes in estimating. Stakeholder satisfaction can be monitored through frequent meetings. it is difficult to estimate how long an actual project recovery may take. Results from these periodic surveys can also be used to highlight any positive improvements. it is beneficial to use a standard assessment approach. Inc. To improve the productivity of the review process. It should also include references to the types of project deliverables that are required or recommended for the project and key quality components of these deliverables. the review also shed light on the interactions between the various project stakeholders. Additionally.Review and Recover Troubled Projects The Project Recovery Timeline Because each project is unique in size. and developing a measurement system for gauging stakeholder satisfaction. The PMO was successful in both helping the project team meet customer expectations and in establishing an ongoing process for identifying. The review/recovery team can plan for the recovery in a relatively short period of time by applying typical project planning techniques and by focusing resources on the effort. 9 . reviewing.983. and recovering at-risk projects in their pipeline. and scope. type. scheduling.

these metrics provide the strongest benefit case Stakeholders sharing a common vision of the project. encouraging honest and frank information exchange. including the project status.Review and Recover Troubled Projects Critical Success Factors for Project Recovery Project and recovery teams need to manage a number of critical factors to ensure a successful project recovery. schedule. to lead the Project Review and Recovery process Identifying projects in need of recovery as early as possible in their project lifecycle Establishing a sense of urgency and a heightened level of control in managing requirements. and changes to the original scope Monitoring stakeholder satisfaction throughout the recovery process Prioritizing non-essential objectives and requirements and conducting tradeoff analyses to deliver the best solution Claiming Project Recovery Success How do you determine if the project review and/or recovery were successful? How do you decide if the review and recovery processes brought value to your organization? The simple answer may be “we know we are successful when the project delivered meets customer expectations while minimizing variances in schedule or cost. the more tangible factors indicating a successful review and recovery may include: » » » » » » Demonstrated cost savings or avoided opportunity cost. risks. and sharing knowledge gained in the process Using project managers experienced in turning around projects. and the objectives/requirements that are being delivered Resolution of most or all project issues Development of an achievable schedule agreed upon by all stakeholders The end of negotiating and updating project baselines Stakeholders confident in the project team and overall project performance 10 . costs. when a repository of data about similar projects exists. or recovery specialists.” However. These factors include: » » » » » » Cultivating and controlling communication with all project stakeholders to manage expectations.

Review and Recover Troubled Projects Summary With the large number of troubled projects facing industry today. PA: Center for Business Practices. Havertown. (1999).983. Additionally. Proceedings of the 30th Annual Seminars & Symposium. Newtown Square. PA: Project Management Institute.K. Voelker. These processes should address identifying troubled projects as early as possible in their project lifecycle. S. Purba. each organization’s PMO should develop and implement processes for reviewing and recovering projects. References Crawford. pmsolutions white paper series | p 800. Havertown. The strategic project office. Window of opportunity projects – or how to control runaway projects. & Zucchero. to improve PM practices in their organization. The PMO should define a structured approach that is used in the review and recovery activities. (2002). J. PA: Center for Business Practices.com | ©2008 Project Management Solutions. The state of the PMO: 2007-2008 (2007). and to minimize the chances of repeating previous mistakes. and train or hire specialists who can apply the review and recovery methodology in an effective and positive manner. Inc. Troubled projects: project failure or project recovery (2006). J. A. J. All rights reserved. Project rescue. New York: Marcel Dekker.0388 | pmsolutions. 11 .J. New York: Osborne/McGraw-Hill.. each organization should capture the lessons learned from each project review. (2004).

pmsolutions white paper series | p 800. Inc.Review and Recover Troubled Projects Project Management Solutions. corporate training delivered through the PM College® (www.pmsolutions. process and methodology development. (PM Solutions) provides project management consulting.0388 | pmsolutions.com. With corporate headquarters located just outside Philadelphia.983.. com). Core services include project and program resources. Inc. training. For more information. All rights reserved.pmcollege. Pa. PM Solutions serves a diverse client base that includes some of the world’s leading organizations. and resources to help organizations improve performance and deliver critical projects successfully. and project review and recovery. . and management consulting services that directly support project portfolio management. visit www. project office deployment and enhancement. USA. organizational project management maturity.com | ©2008 Project Management Solutions.