The Future of Project Management: Preparing The Next Generation Project Manager

Transcription

1 1 The Future of Project Management: Preparing The Next Generation Project Manager By Harold Kerzner, Ph.D. 10/9/ International Institute for Learning, Inc. 1

2 Best Practices in Project Management Dr. Harold Kerzner 2 Copyright Most of the material in this presentation has been taken or adapted from several sources: Harold Kerzner, Advanced Project Management: Best Practices on Implementation, 2 nd Edition, 2004, John Wiley & Sons Publishers Harold Kerzner, Project Management Best Practices: Achieving Global Excellence, 1st Edition, 2006; and 2 nd Edition, 2010, John Wiley & Sons and IIL Publishers Harold Kerzner and Frank Saladis, Value-Driven Project Management, 2009, John Wiley & Sons and IIL Publishers Harold Kerzner and Carl Belack, Managing Complex Projects, 2010, John Wiley & Sons and IIL Publishers Harold Kerzner, Project Management Metrics, KPIs and Dashboards, 2011, John Wiley & Sons and IIL Publishers 2010 by Dr. Harold Kerzner. All rights reserved. Material and slides cannot be copied or transmitted in any electronic format without written permission of Dr. Harold Kerzner. 2

3 3 Changing Times: The PM Becomes A Business Manager 3

4 4 Today s View of Project Management Project management has evolved into more of a business process rather than just a project management process. Today we are managing our business by projects, and project management is being applied to both traditional and nontraditional projects. Each project is seen as a collection of value scheduled for realization.

5 Webinar Learning Series 5 Changes in Project Management HISTORICAL 1990 S TODAY VIEW (AND IN THE FUTURE) ROLE AND RESPONSIBILITY MONITOR AND CONTROL DURING EXECUTION PLANNING FOR PROJECT EXECUTION STRATEGY DEVELOPMENT, PROJECT SELECTION AND PROJECT EXECUTION INPUT WHEN BROUGHT ON BOARD KNOWLEDGE REQUIREMENTS CUSTOMER EXPECTATIONS AFTER CONTRACT AWARD OR AT END OF INITIATION TECHNICAL KNOWLEDGE (COMMAND OF TECHNOLOGY) DURING PROPOSAL PREPARATION MOSTLY TECHNICAL BUT SOME BUSINESS KNOWLEDGE BEGINNING OF COMPETITIVE BIDDING AND PROTFOLIO SELECTION OF PROJECTS MOSTLY BUSINESS BUT SOME TECHNICAL KNOWLEDGE (UNDERSTANDING OF TECHNOLOGY) DELIVERABLES DELIVERABLES BUSINESS SOLUTIONS DEFINITION OF SUCCESS MEETING THE TRIPLE CONSTRAINT MEETING THE TRIPLE CONSTRAINT MULTIPLE SUCCESS CRITERIA (PROJECT AND BUSINESS VALUE SUCCESS) IIL-Webinar 1-5

6 6 Executive View of Project Management OLD VIEW Project management is a nice to have career path, but not necessary We need our people certified as a PMP PMs are used for project execution only Strategy and execution are separate activities NEW VIEW Project management is a strategic or core competency We need people certified in project management and in business processes PMs should be involved in portfolio management and capacity planning PMs must bridge strategy and execution

7 7 Global Versus Non-Global Companies FACTOR NON-GLOBAL GLOBAL Core business PM satisfaction level Sell products and services Must be good at project mgt. Sell business solutions (value) Must excel at project mgt. PM methodology Rigid A framework Supporting tools Minimal Extensive Continuous improvement Business knowledge Follow the leader A necessity for survival Your company s business strategy Type of team Co-located Virtual Client s business strategy as well as yours

8 8 Managing Complex Projects 8

9 9 Percent of Projects Using Project Management Current use of project management

10 Limitations to Selecting a Complex Project 10 No project portfolio management function Poor understanding of capacity planning Poor understanding of project prioritization Lack of tools for determining value Lack of project management tools/software

11 11 Project Management Software 95% of Today s Software INITIATION PLANNING EXECUTION CONTROLLING CLOSURE Portfolio Management Benefit-Cost Analyses Feasibility Studies Criteria Definition KPI Definition Assumptions Defined Evaluation (Value) Criteria Risk Management Behavioral Software Areas of Deficiency Best Practices Library Failure Analyses Lessons Learned KPI Library Stakeholder Management Library

12 12 The Traditional Project Time duration of 6-18 months The assumptions are not expected to change over the duration of the project Technology is known and will not change over the duration of the project People that start on the project will remain through to completion (the team and the sponsor) The statement of work is reasonably well-defined The target is stationary Few stakeholders

13 13 The Nontraditional (Complex) Project Time duration can be over several years The assumptions can and will change over the duration of the project Technology will change over the duration of the project People that approved the project (and are part of the governance) may not be there at completion The statement of work is ill-defined and subject to numerous changes The target may be moving Multiple stakeholders

14 14 Traditional vs. Nontraditional Projects MANAGING TRADITIONAL PROJECTS Single person sponsorship Possibly a single stakeholder Project decision-making Inflexible project management methodology Periodic reporting Success is defined by the triple constraint KPI are derived from EVM Stakeholder mgt. noncritical MANAGING NONTRADITIONAL PROJECT Governance by committee Multiple stakeholders Both project and business decision-making Flexible or fluid project management methodology Real-time reporting Success is defined by the triple constraint and value Unique value-driven KPI Stakeholder mgt. critical

15 The Need for Business Solution Partners Not all companies have the ability to manage complexity on their own Insufficient resources Lack of qualified resources Lack of support for project management education Lack of a project management methodology Lack of knowledge in dealing with complexity Lack of supporting tools for project management Fear of failure

16 16 Customer RFP Requirements Contractors must have PMP s Contractors must have an EPM system or framework, and it may have to be qualified or approved by the client Contractor is willing to customize the methodology or framework to the client s environment Contractors must capture best practices and share intellectual property with the client Contractors must identify a reasonable maturity level in project management

17 17 Engagement Expectations Customer s Expectations Business Solutions Contractor s Expectations Long Term Strategic Partnerships

18 Before and After Engagement Project Management 18 BEFORE ENGAGEMENT PROJECT MANAGEMENT Continuous competitive bidding Focus on near-term value of the deliverable Client develops their own business strategy Client has access to limited PM tools AFTER ENGAGEMENT PROJECT MANAGEMENT Sole-source or singlesource contracting (fewer suppliers to deal with) Focus on lifetime value of the deliverable Contractor supports the client in project portfolio management Access to contractor s tool kits

19 19 Areas of Best Practices (Givebacks) Type of Best Practice Others Scheduling Risk Management Financial/Portfolio Mgt. Project Planning/Execution Number of Best Practices

20 20 Project Management Skills 20

21 21 Skill Set All project managers have skills, but not necessarily the right skill set for the projects at hand or in the future. What skills/competencies will project managers need in 3 years, 5 years and 10 years from now?

22 22 PMBOK Guide Limitations RISK MGT. QUALITY MGT. COMMUNICATIONS MGT. BUSINESS/ STRATEGY HUMAN RESOURCE MGT. POLITICS STAKEHOLDER MGT. INTEGRATION MGT. CULTURE/ RELIGION PROCUREMENT MGT. SCOPE MGT. TIME MGT. COST MGT.

23 23 Career Path Opportunities Certification Boards Project Sponsor Global Project Manager Senior Project Manager Project Manager Junior Project Manager Project Management Growth

24 24 Some New Developments 24

25 New Developments in Project Management 25 New Success Criteria Governance Key Performance Indicators Dashboard Design Measurement

26 26 The Changing Definition of Success Success is simply the triple constraint Customer satisfaction must also be considered There are other (secondary) factors to be considered (2004) Success must have a business component The constraints must be prioritized There are multiple definitions of success (each customer/stakeholder can have a different definition) (2008) There are categories of success, and value is now part of the success criteria

27 Modifying The Triple Constraints Time Image/ Reputation Cost Value Scope Quality Risk Quality Value Scope Traditional Projects Risk Cost Time Image/Reputation Complex Projects

28 28 Disney s Prioritization of Constraints Time Cost Scope Safety Aesthetic Value Quality

29 New Developments in Project Management 29 Governance New Success Criteria Key Performance Indicators Dashboard Design Measurement

30 30 Defining Value Metrics (KPI) PAST VIEW PRESENT VIEW Metrics are fixed for the duration of the project (Time and Cost Metrics Only) Metrics can change over the duration of the project (Metric-Driven Project Management)

31 31 Typical KPI Percent of work packages adhering to the schedule Percent of work packages adhering to the budget Number of assigned resources versus planned resources Percent of actual versus planned baselines completed to date Percent of actual versus planned best practices used Project complexity factor Customer satisfaction ratings Number of critical assumptions made Percent of critical assumptions that have changed Number of cost revisions Number of schedule revisions Number of scope change review meetings Number of critical constraints Percent of work packages with a critical risk designation Net operating margins

32 32 Dissecting The KPIs Key = a major contributor to success or failure Performance = measurable, quantifiable, adjustable and controllable elements Indicators = reasonable representation of present and future performance

33 33 Defining a KPI KPIs can be selected using the following: Predictive: able to predict the future of this trend Measurable: can be expressed quantitatively Actionable: triggers changes that may be necessary Relevant: the KPI is directly related to the success or failure of the project Automated: reporting minimizes the chance of human error Few in number: only what is necessary

34 New Developments in Project Management 34 Governance New Success Criteria Key Performance Indicators Dashboard Design Measurement

35 35 Dashboard Design Dashboard

36 36 Dashboards Versus Scorecards FACTOR DASHBOARDS SCORECARDS Performance Operational issues Strategic issues WBS level for measurement Frequency of update Work package level Real time data Summary level Periodic data Target audience Working levels Executive levels

37 New Developments in Project Management 37 Governance New Success Criteria Key Performance Indicators Dashboard Design Measurement

38 38 A Comparison: EVMS, EPM and VMM Variable EVMS EPM VMM Time Cost Quality Scope Risks Tangibles Intangibles Benefits Value Tradeoffs

39 Measuring The Metric Metric or KPI Profitability Customer Satisfaction Goodwill Penetrate New Markets Develop New Technology Technology Transfer Reputation Stabilize Work Force Utilize Unused Capacity Ability to Measure Easy Hard Hard Easy Medium Medium Hard Easy Easy

40 40 Types of Performance Reports Progress Reports Status Reports Forecast Reports

41 41 Benefits and Value at Completion Forecast Reports Traditional Reporting Time at Completion Cost at Completion Future Reporting Time at Completion Cost at Completion Benefits at Completion Value at Completion Other Metrics at Completion (Business Leading Indicators; i.e. Time to Value)

42 New Developments in Project Management 42 Governance New Success Criteria Key Performance Indicators Dashboard Design Measurement

43 43 Conclusions and Walkaways Project managers are more knowledgeable about the business Project managers should participate in project portfolio management Client s perception of value may be more important than time or cost Executives must invest in the future of project management in their organizations Project managers are not and will not be a threat to senior management