Assessment of the Program and Project Management Processes

mmmmmiuiiwutiwmmimiimmbmmxiiauhtiuimimnukni^i* Lgistis Management Institute Assessment f the Prgram and Prjet Management Presses U.S. Army Crps f Engineers Great Lakes and Ohi River Divisin CE912T1 July 2001 Jhn L. Dettbarn, Jr. Mark Crfman DISTRIBUTION STATEMENT A James L. Hathaway Apprved fr Publi Release Q William Ibbs Distributin Unlimited 20010821 039

Assessment f the Prgram and Prjet Management Presses U.S. Army Crps f Engineers Great Lakes and Ohi River Divisin CE912T1 July 2001 Jhn L. Dettbarn, Jr. Mark Crfman James L. Hathaway C. William Ibbs The views, pinins, and findings ntained in this reprt are thse f LMI and shuld nt be nstrued as an ffiial ageny psitin, pliy, r deisin, unless s designated by ther ffiial dumentatin. LOGISTICS MANAGEMENT INSTITUTE 2000 RPORATE RIDGE MCLEAN, VIRGINIA 22102-7805

REPORT DOCUMENTATION PAGE Frm Apprved OPMN.0704-0188 Publi reprting burden fr this lletin f infrmatin is estimated t average 1 hur per respnse, inluding the time fr reviewing instrutins, searhing existing data sures gathering, and maintaining the data needed, and reviewing the lletin f infrmatin. Send mments regarding this burden estimate r any ther aspet f this lletin f infrmatin, inluding suggestins fr reduing this burden, t Washingtn Headquarters Servies, Diretrate fr Infrmatin Operatins and Reprts, 1215 Jeffersn Davis Highway, Suite 1204, Arlingtn, VA 22202-4302, and t the Offie f Infrmatin and Regulatry Affairs, Offie f Management and Budget, Washingtn, DC 20503. 1. AGENCY USE ONLY (Leave Blank) 2. REPORT DATE 4. TITLE AND SUBTITLE JulOl 3. REPORT TYPE AND DATES VERED Final 5. FUNDING NUMBERS Assessment f the Prgram and Prjet Management Presses: U.S. Army Crps f Engineers Great Lakes and Ohi River Divisin CDACW31-94-D-0092 PE0902198D 6. AUTHOR(S) Jhn L. Dettbarn, Jr., Mark Crfman, James L. Hathaway, C. William Ibbs 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) Lgistis Management Institute 2000 Crprate Ridge MLean, VA 22102-7805 8. PERFORMING ORGANIZATION REPORT NUMBER LMI-CE912T1 9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) Mr. Thedre A. Brwn, Deputy Diretr & Chief, Business Management Diretrate f Civil Wrks and Management Jhn Weld Pek Federal Offie Building 550 Main Street, Rm 10-008 Cininnati, OH 45202 10. SPONSORING/MONITORING AGENCY REPORT NUMBER 11. SUPPLEMENTARY NOTES 12a. DISTRIBUTION/AVAILABILITY STATEMENT 12b. DISTRIBUTION DE A: Apprved fr publi release; distributin unlimited 13. ABSTRACT (Maximum 200 wrds) The U.S. Army Crps f Engineers is respnsible, thrugh its Diretrate f Civil Wrks, fr the planning, design, nstrutin, and peratin f ivil wrks prjets. Thrugh its Diretrate f Military Prgrams, it als manages the design and nstrutin f majr failities and infrastruture t supprt the Army and ther DD and internatinal prgrams. Tw years ag, USACE adpted a ustmer-fused prgram and prjet management philsphy t ensure the timely delivery f st-effetive, quality prduts and servies. This reprt nveys the results f a task t evaluate hw effetively the Crps' Great Lakes and Ohi River Divisin has implemented that philsphy and t identify areas in whih the LRD and its subrdinate distrits uld imprve. The study mpared the LRD business presses t thse nsistent with the tenets f prjet management endrsed by the Prjet Management Institute and best-in-lass firms and rganizatins using mdern prjet management business praties. The study fund many examples f sund, and smetimes innvative, prjet management praties within the LRD. Hwever, they vary signifiantly amng LRD's seven distrits. The reprt identifies and remmends praties that ffer the LRD pprtunities fr imprving prjet delivery perfrmane and inreasing ustmer satisfatin. 14. SUBJECT TERMS U.S. Army Crps f Engineers, Great Lakes and Ohi River Divisin, Engineering Regulatin 5-1-11, prgram management, prjet management 15. NUMBER OF PAGES 138 16. PRICE DE 17. SECURITY CLASSIFICATION OF REPORT Unlassified 18. SECURITY CLASSIFICATION OF THIS PAGE Unlassified 19. SECURITY CLASSIFICATION OF ABSTRACT Unlassified 20. LIMITATION OF ABSTRACT UL NSN 7540-01-280-5500 Standard Frm 298, (Rev. 2-89; Presribed by ANSI Std. 239-18 299-01

LOGISTICS MANAGEMENT INSTITUTE Assessment f the Prgram and Prjet Management Presses: U.S. Army Crps f Crps f Engineers Great Lakes and Ohi River Divisin CE912T1/JULY2001 Exeutive Summary The U.S. Army Crps f Engineers (USACE) is respnsible, thrugh its Diretrate f Civil Wrks, fr the planning, design, nstrutin, and peratin f ivil wrks prjets, inluding thse dne in njuntin with state and lal gvernments. Thrugh its Diretrate f Military Prgrams, it als manages the design and nstrutin f majr failities and infrastruture t supprt the Army and ther DD and internatinal prgrams. In 1999, the Crps perfrmed nstrutin valued at mre than $6 billin fr its ustmers. Tw years ag, USACE adpted a ustmer-fused prgram and prjet management PPM philsphy t ensure the timely delivery f st-effetive, quality prduts and servies. Its pliy guidane Engineer Regulatin (ER) 5-1-11, Prgram and Prjet Management, designed t integrate its prjet management presses presribes this philsphy but prvides nsiderable latitude fr eah distrit in implementing its wn prjet management business presses. The Crps' Great Lakes and Ohi River Divisin (LRD), headquartered in Cininnati, asked the LMI t evaluate hw effetively it has managed implementatin f ER 5-1-11 and t identify areas where the LRD and its subrdinate distrits uld imprve. In respnse, we mpared the LRD business presses t thse nsistent with the tenets f prjet management endrsed by the Prjet Management Institute PMI and best-in-lass firms and rganizatins utilizing mdern prjet management business praties. Althugh we fund many examples f sund, and smetimes innvative, prjet management praties within the LRD, we fund that the LRD's prjet management business presses and praties vary signifiantly amng the seven distrits. We identified and remmended praties that ffer the LRD pprtunities fr imprving the effiieny and effetiveness f its prjet management t imprve prjet delivery perfrmane and inrease ustmer satisfatin. 1 U.S. Army Crps f Engineers, Prgram and Prjet Management, ER 5-1-11 (Washingtn, DC: 27 February 1998). iii

Our key remmendatins are as fllws: Clarify and prmulgate the linkage between the rprate strategy and prjet exeutin by develping lear pliies, standards, and guidane. Define and standardize the ativities f the prjet management business press (PMBP). Inrprate prjet suess fatrs, business press flws fr bth multiprjet and single-prjet envirnment, and the use f lessns-learned in prjet planning. Develp a risk management prgram fr the distrits. Prjets shuld inlude the develpment, dumentatin, and distributin f a mprehensive risk management plan. Enhane mmuniatins within distrits and prjet delivery teams (PDTs) by investigating the use f eletrni prjet prtals t imprve llabratin f team members, mvement f prjet infrmatin, and standardizatin f prjet plans. Pursue integratin f P2 the Crps' new prjet management infrmatin system int the distrit peratins. Cnsider the use f a simple prjet sheduling sftware prgram fr prjets that dn't need the mplex netwrk analysis systems. Establish an LRD prjet management mpeteny prgram t enhane mpetenies at the rganizatinal, prjet, and individual levels. Establish lear rles and respnsibilities. Enhane the existing training and ertifiatin prgram fr prjet managers and team members. Establish a prjet supprt ffie (PSO) t assist the prjet manager and PDTs in managing their prjets. The LRD shuld als develp a divisinlevel PSO t prvide and supprt standards, benhmarking, sftware standardizatin, skills develpment, and team-building. Cnsider integratin f the PMBP int the prjet delivery yles using the ISO 9000 ertifiatin press t maintain a ntinuus imprvement fus. Cntinue mpeting fr the Baldrige-type annual awards t stay fused n servie delivery and ustmer satisfatin. Develp a prjet prtfli management prgram at the distrit level t priritize the prjets within the distrit's area f respnsibility and assist in allating resures t the prjet teams. Develp and implement a distrit perfrmane management prgram t mnitr perfrmane f distrit prjets and the prtfli. Cntinue t benhmark prjet management servies against best-in-lass firms and adpt best praties. The LRD is well-psitined t lead the Crps in reating a PMBP t reflet hw business is really dne. IV

Cntents Chapter 1 Intrdutin 1-1 BACKGROUND 1-2 Current PPM Prgram 1-2 Future PPM Initiatives 1-3 Reginal Business Centers 1-3 STUDY APPROACH 1-3 Fus n Perfrmane 1-4 Benhmarking and Press Imprvement 1-6 ORDINATION 1-7 REPORT ORGANIZATION 1-7 Chapter 2 Press Maturity Assessment 2-1 BACKGROUND 2-1 METHODOLOGY '. 2-2 Prjet Management Maturity 2-3 Press Maturity Assessment 2-4 RESULTS 2-5 Prjet Phases and Knwledge Areas 2-6 Analysis f Results 2-8 Distrit Visits 2-11 Chapter 3 Linking Strategy t Exeutin 3-1 INTRODUCTION 3-1 Single Prjets 3-1 Multiple Prjets 3-1 FINDINGS AND NCLUSIONS 3-2 PROJECT MANAGEMENT BUSINESS PROCESSES 3-3 Appliatin f PMBP 3-5 Defining Perfrmane Suess 3-6 Risk Management 3-7

Prjet Management Infrmatin System 3-7 Perfrmane Management System 3-8 Prjet-Level Authrity 3-8 Prjet Management Cmpetenies 3-8 REMMENDATIONS 3-9 Strategy and Prjet Exeutin 3-10 Prjet Suess Fatrs 3-12 Prjet Management Business Presses 3-13 Risk Management Prgram 3-18 Cllabrative Prjet Prtals 3-20 Rles and Respnsibilities 3-21 Cmpeteny in Prjet Management 3-21 Prjet Supprt Offie 3-24 Benhmarking 3-25 Chapter 4 Prjet Prtfli Management 4-1 INTRODUCTION 4-1 PORTFOLIO MANAGEMENT 4-2 Prjet Prtfh Management Prgram 4-2 Priritizing Prjets in Prtfli 4-3 PRIORITIZING PROJECTS 4-4 Prjet Pririty Matrix 4-5 Understanding Prjet Risk 4-5 Chapter 5 Perfrmane Management 5-1 INTRODUCTION 5-1 PERFORMANCE MANAGEMENT 5-2 Best-in-Class Systems 5-2 Types f Measures 5-3 Establishing the Prgram 5-3 Respnsibility and Auntability 5-4 Finanial and Nnfinanial Indiatrs 5-4 FINDINGS AND NCLUSIONS 5-5 REMMENDATIONS 5-5 VI

Cntents Chapter 6 Preliminary Implementatin Plan 6-1 PROJECT MANAGEMENT BUSINESS PROCESSES 6-1 PROJECT PORTFOLIO MANAGEMENT 6-3 PERFORMANCE MANAGEMENT 6-3 Appendix A. Assessment Definitins Appendix B. Maturity-Level Definitins Appendix C. Sample Questins Appendix D. Benhmarking Study Partiipants Appendix E. Interview Questins Appendix F. Detailed PMBP Appendix G. Prdut Delivery Presses FIGURES Figure 1-1. Benhmarking and Press Imprvement Study Apprah 1-6 Figure 2-1. Areas Cvered by the Press Maturity Assessment 2-2 Figure 2-2. Levels f Prjet Management Press Maturity 2-3 Figure 2-3. LRD Prjet Management Press Maturity 2-6 Figure 2-4. LRD Prjet Management Press Maturity versus Peer Grup 2-7 Figure 2-5. LRD Distrit Results Cmpared with the Peer Grup 2-7 Figure 2-6. LRD Distrit Cmparisn f Press Maturity Level 2-8 Figure 3-1. Relatinship f Strategi, Prjet, and Operatinal Management 3-10 Figure 3-2. Linkage f Strategi and Tatial Perspetives f the PMBP 3-11 Figure 3-3. Relatinship f Multiprjet Management and Individual Prjet Management 3-14 Figure 3-4. Prjet Management Cntrl Feedbak Lp fr Use During the Exeutin Phase f a Prjet 3-16 Figure 3-5. Current Organizatinal Respnsibilities f the PDTs 3-18 Figure 4-1. Sample Prjet Ranking Chart 4-5 Vll

TABLES Table 1-1. USACE PPM Perfrmane Questin 1-5 Table 3-1. Critial Prjet Suess Fatrs 3-12 Table 3-2. Prjet Management Rles and Respnsibilities 3-22 Table 3-3. PSO Ativities 3-25 Table 5-1. Sample Perfrmane Measurements fr LRD Distrits 5-6 Vlll

Chapter 1 Intrdutin The U.S. Army Crps f Engineers (USACE) is respnsible, thrugh its Diretrate f Civil Wrks, fr the planning, design, nstrutin, and peratin f ivil wrks prjets, inluding thse dne in njuntin with state and lal gvernments. Thrugh its Diretrate f Military Prgrams, it als manages the design and nstrutin f majr failities and infrastruture t supprt the Army, Air Fre, and seleted Navy latins, as well as ther DD and internatinal prgrams. In 1999, the Crps perfrmed nstrutin valued at mre than $6 billin fr its ivil wrks, military, and ther ageny ustmers. Tw years ag, USACE adpted a ustmer-fused prgram and prjet management (PPM) philsphy t ensure the timely delivery f st-effetive, quality prduts and servies. Its pliy guidane, Engineer Regulatin (ER) 5-1-11 Prgram and Prjet Management, whih is designed t integrate its prjet management presses, presribes this philsphy but prvides nsiderable latitude fr eah distrit in implementing its wn prjet management business presses. The Crps' Great Lakes and Ohi River Divisin (LRD), headquartered in Cininnati, 2 asked the LMI t evaluate hw effetively it has managed implementatin f ER 5-1-11 and t identify areas where the LRD and its subrdinate distrits uld imprve. In respnse, we mpared the LRD business presses t thse nsistent with the tenets f prjet management endrsed by the Prjet Management Institute (PMI) and best-in-lass firms and rganizatins utilizing mdern prjet management business praties. In ur study, we fus n the perfrmane f the LRD in the ntext f prjet management presses. Using the PMI prjet management bdy f knwledge (PMBOK) 3 standard fr ur study, we emplyed mpetitive benhmarking and ther business press imprvement tehniques t identify best praties frm industry and the publi setr fr adptin by the LRD. 4 1 U.S. Army Crps f Engineers, Prgram and Prjet Management, ER 5-1-11 (Washingtn, DC: 27 February 1998). 2 The Crps has seven f these divisins, lletively knwn as majr subrdinate mmands (MSCs) and as reginal business enters (RBCs). Under the RBC nept, whih is relatively new t the Crps, the varius RBCs define their rles and respnsibilities. In this reprt, we use the terms divisin, MSC, and RBC interhangeably. 3 In September 1999, the Amerian Natinal Standards Institute apprved the PMBOK as a natinal standard. Ardingly, we strutured ur analysis arund its nine knwledge areas. 4 The Crps' strategi visin enurages the design f "best business presses" t deliver prduts t the ustmers. 1-1

BACKGROUND In this hapter, we desribe USACE prjet management prgrams and business initiatives and ur study apprah. In 1988, the Crps implemented Initiative 88 a life-yle prjet management press that relied n a matrix management rganizatinal struture. Under this strategi plan, the Crps mved its distrits frm a funtinal rganizatinal struture t a matrix rganizatin with a deputy fr prjet management assigned versight respnsibilities. 5 Althugh this frmula did nt prve immediately suessful, in that the distrit funtinal rganizatins (namely, engineering and nstrutin) still retained extensive pwer, it harted the urse fr the Crps t beme a prjet management rganizatin. Current PPM Prgram In respnding t the hanging nature f its missin respnsibilities, the Crps revamped its stati, highly presriptive prjet management apprah essentially a rigid framewrk f mandatry, generi presses and adpted a ustmerfused prgram and prjet management business press (PMBP) philsphy intended t ensure the timely delivery f st-effetive, quality prduts and servies t its ustmers. In February 1998, USACE issued ER 5-1-11 t integrate its prjet management business press. It prpsed a new apprah t ding business and prvided guidane n PPM implementatin. The regulatin refleted a "paradigm shift t fus attentin n the prgram/prjet exeutin press, rather than the [prduts and servies f] individual rganizatins" and integrated prgram management under the Cmmander fr rprate versight. 6 In effet, it entralized prgram management t enhane rprate deisin-making and prvided strategi gals fr the distrits t attain. At the strategi level within eah distrit, the Distrit Deputy Engineer fr Prgrams and Prjet Management (DDPM) was given prgram versight fr all wrk mpleted within the distrit. At the prjet level, the prjet managers (PMs) were made respnsible fr managing prjet resures, data, and mmitments, using the PMBP, nsisting in part f the prjet management plan and the prjet management infrmatin systems. 7 By definitin, eah prjet had ne PM, wh ats as the team leader and primary pint f ntat fr the ustmer. This was a key hange t the Crps' traditinal engineering and nstrutin 5 Steven E. Brwning, Anthny F. Leketa, and Jhn Saia, "Managing the Organizatin by Teamwrk," PMI Cnferene, Philadelphia, PA, 12-13 Otber 1999. 6 See Nte 1. The rprate prjet management infrmatin system presribed fr use in the Crps was the prjet management infrmatin system (PROMIS), an in-huse system that aptured prjet data and linked diretly t the Crps' finanial management system, knwn as CEFMS. 1-2

Intrdutin funtinal rganizatin struture and reated signifiant fritin within the rganizatin. As with many rganizatins embarked n a signifiant hange in rprate ulture, hange ame very slwly. Future PPM Initiatives The Crps is revising its PPM and quality management regulatins t reate an verarhing pliy dument that utlines its business philsphy and desribes hw it manages the wrk it reeives. We see this new dument as the next evlutinary step in prviding the neessary visin and guidane needed by the field ativities in advaning the rprate hange t a prjet management rganizatin. It addresses prjet perfrmane measurements, ntinuus imprvement, and teamwrk. This study used the urrent ER 5-1-11 in assessing the LRD's perfrmane. As we were mpleting it, the Crps was wrking t define its pliies fr business praties and develp a new rprate management infrmatin system. These signifiant effrts will hange the fae f its prjet management. Frm the results f ur assessment, the LRD is well pised t lead the rest f the Crps in effetively implementing headquarters' pliies and diretives and suessfully attaining the Chiefs visin f imprved perfrmane and ustmer satisfatin. The RBC is ne plae where this leadership an be shwn. Reginal Business Centers In a parallel effrt t the PPM prgrams, the Crps established RBCs under a new business-entri philsphy that hlds the MSCs auntable fr the atins f their subrdinate distrits. They were designed t enhane the business management f the Crps' reginal ffies by leveraging underutilized resures between distrits, suh as labr, tehnial and management expertise, and ntrat apaity. Eah RBCs reginal management bard (RMB) wrks t balane the resures available within the divisin's area f respnsibility t help enable the mst effiient missin exeutin. The RMB is respnsible fr bth the PMBP and resure management within the distrits. It an prvide key leadership and spnsrship f prjet management ativities. This study's fus n perfrmane management is a natural next step fr the RMB. The remmendatins in this study all fr a linkage between the management f a single prjet and the management f multiple prjets in a distrit's prtfli an issue f effetive prtfli management and resure allatin. STUDY APPROACH Thrughut ur study, we fused n perfrmane and suess in meeting prjet management requirements and ther strategi gals. Our first step was t put the 1-3

Crps' prjet management prgram in a perfrmane ntext. In s ding, we asked hw an the Crps, and LRD in partiular, ahieve the prjet management perfrmane bjetives f ER 5-1-11. Fus n Perfrmane Fus n perfrmane management has dminated the agenda f federal gvernment managers in the past deade, driven in part by the requirements f the Gvernment Perfrmane and Results At (GPRA) f 1993 and the pressures f nstrained budgets and imprved servie delivery requirements. 8 The GPRA direted federal rganizatins t develp strategi plans with apprpriate perfrmane measures t evaluate prgress tward meeting gals. Speifially, the GPRA required agenies t "imprve federal prgram effetiveness and publi auntability by prmting a new fus n results, servie quality, and ustmer satisfatin." 9 It is, in part, frm this ngressinal mandate, and the inreasingly mpetitive nature f infrastruture develpment, that the Crps' strategi gals inlude imprving the exeutin f its prgram and prjet delivery and inreasing ustmer satisfatin, stensibly using prjet management as a atalyst t effet this hange. But has implementing prjet management in the Crps and LRD made a differene? The traditinal apprah t answering this questin wuld be t evaluate the Crps' st and shedule data frm a representative sample f prjets and ustmer survey data and respnses t see if prjets were n time and within budget. This apprah was nt feasible fr this task beause the distrit's prjet data in the PROMIS database were nt suffiiently rbust the neessary infrmatin t alulate st and shedule perfrmane was nt available. Mre imprtantly, mdern prjet management perfrmane analysis requires mre than just st and shedule data t determine suess. We define "mdern" prjet management as the integratin f the lassi fus (n st and shedule) and meeting ustmer needs and expetatins. Inherent in this definitin are the mplexities f teamwrk, rganizatinal struture, and ther envirnmental nerns. T answer the PPM perfrmane questin, we frmulated the Crps' prgram perfrmane questin in Table 1-1, in the ntext f its mplex netwrk f internal and external fatrs. Sine st and shedule wuldn't mpletely answer In the early 1990s, Cngress fund "that ngressinal pliymaking, spending deisins and prgram versight were seriusly handiapped by insuffiient attentin t prgram perfrmane and results. Furthermre, federal managers were seriusly disadvantaged in their effrts t imprve prgram effiieny and effetiveness, beause f insuffiient artiulatin f prgram gals and inadequate infrmatin n prgram perfrmane" (U.S. Cngress, 1993). In respnse t these findings, Cngress enated the GPRA. 9 Publi Law 102-62,103rd Cng., 1st sess. (5 January 1993). 1-4

Intrdutin the perfrmane questin, we used prjet management press maturity as a surrgate fr atual perfrmane measurements. Table 1-1. USACE PPM Perfrmane Questin Can the......with these resures......thrugh these atins, presses, and deisins......meet these bjetives..t attain these gals......fr these ustmers? Crps', divisins', and distrits' PPM prgrams Legislative authrity, budget authrity, staff, equipment, and infrmatin and data systems Enable RBCs/divisins t leverage resures arss funtinal and gegraphi bundaries. Establish DDPM t integrate distrit prduts t leverage resures arss funtinal bundaries. Assign tehnial funtin hiefs respnsibility t develp tehnially mpetent wrk fre, assign tehnial members t prjet teams, and ensure tehnial prdut quality. Hld PM respnsible and auntable fr suessful mpletin and delivery f assigned prjets t ustmers, within established sts, shedules, and quality parameters. PMBP elements inlude the fllwing: Centralize PM versight under DDPM. Establish prjet teams led by PM. Obtain spe agreement with ustmer. Utilize rprate management infrmatin systems. Prepare prjet plan. Establish prjet ntrls. Evaluate against prjet baseline (spe, shedule, st). Maintain fisal stewardship. Failitate ustmer invlvement. Cntinuusly imprve ustmer servie. Evaluate prjet perfrmane; dument lessns learned. Change int a PM-riented rganizatin thrugh rganizing t effetively exeute prjet management (i.e., t redue r eliminate the stvepipe effet) and ensure all funtinal elements and disiplines wrk tgether. Develp and implement unifrm PMBPs thrughut the Crps, divisins, and distrits t enhane servie t ustmers: Optimize ustmer and rprate resures. Fster teamwrk. Prvide a fal pint fr interfae with ustmers. Emphasize mpleting prjets and prgrams rather than just individual prjets r phases; ensure PMBP reflets interdependent nature f prjets and prgrams thrughut the life yle f a prjet. Enhane USACE's reputatin as wrld's premier engineering rganizatin. Imprve exeutin f prjets and prgrams. Inrease ustmer satisfatin. Cngress and administratin, state and lal muniipalities, design and nstrutin industry, ther federal agenies, DD, Department f the Army, and USACE internal (Civil Wrks, Military Prgrams, et.) Referenes: Develped frm ER 5-1-11. Evaluate PM perfrmane and benhmark against industry and ther agenies; selet and implement best praties. 1-5

Benhmarking and Press Imprvement After develping ur prgram lgi mdel, we used a benhmarking tehnique develped by Prfessr Bill Ibbs at the University f Califrnia, Berkeley, t investigate hw effetively the LRD implemented prjet management presses. 10 We assessed the LRD distrits' business presses by mparing the maturity f their prjet management presses t private-setr best-in-lass firms. The bjetive f the benhmarking analysis, using industry standards, was threefld: assess the LRD's prjet management press maturity, apply best-in-lass industry standard benhmarks, and identify areas fr perfrmane imprvement and areas where effiienies already exist. Frm this analysis, we identified differenes, r gaps, and used them t fus ur fllw-n interviews with PMs and ther members f the prjet delivery team (PDT) at eah distrit. We then analyzed ptential imprvement areas, using data lleted frm industry sures and site visits, and remmended ways t enhane the effetiveness and effiieny f LRD prjet management presses thrughut the divisin. Figure 1-2 presents ur apprah. Figure 1-1. Benhmarking and Press Imprvement Study Apprah CD S 3 <n "I CD "=»a «C f«-cd O S a Prjet Management Press Maturity Assessment Cndut Assessment i Cmpare with Industry Best-in-Class i Evaluate Results and Identify Fus Areas Distrit Visits Interview PMs and Prjet Delivery Team Members 1 r Identify LRD Prjet Management Business Presses Phase II Analysis & Remmendatins ^ ' Identify and Analyze Signifiant PM Press Differenes (LRD, USACE, Industry) Develp, Alternatives t Change PPM Presses ) Investigate Impats n PPM Presses Develp Cnlusins and Remmendatins t Change PPM Presses 10 i Prfessr Ibbs develped the Berkeley prjet management press maturity benhmarking methd with supprt and spnsrship frm the PMI Eduatinal Fundatin. 1-6

Intrdutin ORDINATION A benhmark and press imprvement study requires signifiant peratin frm the rganizatin being evaluated sine detailed press infrmatin is required fr analysis. The LRD and distrit persnnel perated t the fullest extent pssible. Persnnel at eah distrit enthusiastially and prfessinally prtrayed their business presses and praties. We greatly appreiated their investment in time and energy in meeting with us t disuss their presses; we enjyed the pprtunity t learn frm these dynami distrits. In nduting ur study, we were aware f several ther nging studies and initiatives dealing with prjet and prgram management within the Crps. We either rdinated with r reviewed the wrk amplished by these ther teams in rder t gain deeper insight int the nature f prjet and prgram management within the LRD and the Crps. The speifi studies and initiatives we wrked with inluded the fllwing: LRD's draft reginal PMBP and the wrk f the Divisin System Integratin Team HQ, USACE initiatives in rewriting the PPM and quality pliy (ultimately mbined int 5-1-11), establishing PMBP standards, and develping P2 (the fllw-n system t PROMIS) Engineer Inspetr General's reprt n teamwrk mpleted in 1999 Results f the Suth Atlanti Divisin's PMBP mmand inspetin reprt Sarament distrit's (SPK) wrk in PMBP develpment and the Suth Paifi Divisin's (SPD) related reginal PMBP mdel. We als visited the Seattle (NWS) and Savannah (SAS) distrits t review their prjet management prgrams. REPORT ORGANIZATION This reprt nveys the results f the assessment f the LRD prgram and prjet management presses. Chapter 2 presents the prjet management press maturity assessment that helped identify the strengths and weaknesses f the seven LRD distrits and flagged areas t investigate in ur distrit visits. The next three hapters fus n the primary tpis that frmulate ur remmendatins. Chapter 3 deals with linking strategy t exeutin in the distrits' appliatin f PMBP priniples in translating strategi visin int tatial atin. Chapter 4 addresses prjet prtfli management issues, and Chapter 5 disusses 1-7

perfrmane management prgrams. Chapter 6 utlines a tentative implementatin plan fr the LRD and the distrits. The appendixes prvide additinal detail. 1-8

Chapter 2 Press Maturity Assessment BACKGROUND Having the ability t mpare an rganizatin with ther firms and rganizatins arss different industries, bth in the publi and private setrs, gives deisinmakers a pwerful business press imprvement tl. T identify ways they an imprve their perfrmane and redue sts, many federal rganizatins have turned t perfrmane benhmarking. We define benhmarking as The press f imprving perfrmane by ntinuusly identifying, understanding, and adapting utstanding praties and presses fund inside and utside the rganizatin. 1 Brn in the private setr t imprve quality by way f ntinuus press imprvement, benhmarking and the adptin f best praties has withstd the test f time as a prven and effetive management tl. 2 The engineering and nstrutin industry benefited frm adpting ther industry's innvatins and best praties. Fr example, the time-hnred ritial path methd (CPM) s widely used n nstrutin prjets was adpted frm DD weapns prgrams f the 1950s and 1960s, the use f quality assurane prgrams was adpted frm the nulear industry, and the use f bar-ding was adpted frm the grery industry. It is n surprise that federal rganizatins began lking at benhmarking as a tl t ahieve the perfrmane imprvements nw required by GPRA. We use the perfrmane benhmarking tehnique t assess the level f prjet management perfrmane within the LRD. In this hapter, we desribe ur benhmarking apprah and assessment results, fllwed by identifying speifi fus areas, whih we investigated during the distrit visits. Prjet management has rapidly grwn in ppularity in the past 10 years, primarily beause prjet management tehniques and praties ffer firms and rganizatins real help in sueeding in tday's highly mpetitive business envirnment. The Berkeley prjet management benhmarking tl quantitatively 1 Amerian Prdutivity and Quality Center (APQC), Benhmarking: Leveraging "Best Pratie" Strategies, 1998. 2 In reent years, literature n benhmarking has grwn vastly, resulting in a number f thrugh and instrutive bks n the subjet. See, fr example, Rbert C. Camp, Business Press Benhmarking (Milwaukee: ASQC Quality Press, 1995); Mihael J. Spendlini, The Benhmarking Bk (New Yrk: Amerian Management Assiatin, 1992); Gregry H. Watsn, Strategi Benhmarking (New Yrk: Jhn H. Wiley and Sns, In., 1993); and Rihard Y. Chang and P. Keith Kelly, Imprving Thrugh Benhmarking (Irvine, CA: Rihard Chang Assiates, In., 1994). 2-1

examines an rganizatin's verall level f prjet management presses and praties. 3 The Berkeley methdlgy prvides slid and mparative studies arss industries and mpanies within an industry. It als assists managers in assessing whih, if any, prjet management praties wuld be best fr their rganizatins. Fr this study, we define prjet management as the appliatin f knwledge, skills, tls, and tehniques t prjet ativities in rder t meet r exeed stakehlders' needs and expetatins frm a prjet. Figure 2-1 represents the nine knwledge areas frm the PMIPMBOK and the six prjet management phases f a prjet as a basis fr the benhmarking tl used in the study. Appendix A desribes these knwledge areas and phases in detail. Figure 2-1. Areas Cvered by the Press Maturity Assessment Prjet Life-Cyle Phases ' ' " Initiate Define and Organize Plan Trak and Manage Clseut Prjet-Driven Organizatin Envirnment PMBOK Applies t all Prjet Life-Cyle Phases Integratin Management Prurement Management Spe Management Human Resure Management Time Management Cmmuniatin Management Cst Management Quality Management Risk Management METHODOLOGY The Berkeley assessment tl is a rigrus and mprehensive prjet management benhmarking methdlgy used t assess and evaluate the maturity f prjet management presses and praties amng different industries. In analyzing the results f the assessment, we gained unique insight int the LRD's prjet management business mdel. Frm this benhmarking evaluatin, we asertained the perfrmane level f the LRD's distrits in meeting the tenets f the Crps' prjet management pliy guidane in ER 5-1-11. Althugh we btained data ' See Nte 10, Chapter 1. 2-2

Press Maturity Assessment frm eah f the distrits, the fus f ur study was t evaluate the LRD in aggregate nt eah individual distrit within the LRD. Prjet Management Maturity Maturity refers t the relative presene f ertain nditins that tend t prmte, failitate, and ptimize a press. In ur study, we define prjet management press maturity as the level f sphistiatin f an rganizatin's urrent prjet management praties and presses. Figure 2-2 presents the five levels f maturity we use. As a firm mves thrugh prjet management maturity levels, it tends t beme mre sphistiated in prjet management apprah and praties. Appendix B defines eah f the maturity levels in detail. Figure 2-2. Levels f Prjet Management Press Maturity Integrated Level 4 Cntinuus PM Press Imprvement Integrated Multiprjet Planning and Cntrl Systemati Prjet Planning and Cntrl Individual Prjet Planning Basi PM We use prjet management press maturity as a surrgate fr prjet management perfrmane, i.e., by measuring hw an rganizatin nduts prjet management in terms f st, shedule, risk, teamwrk, and rganizatinal struture. In additin, by benhmarking and ntinually evaluating prjet management press maturity, an rganizatin an measure its perfrmane. We asked tw general questins in ur assessment f the LRD: D the distrits d the "right" prjet management ativities? Hw d they mpare in ding the right things with thse best-in-lass rganizatins arss several industries? 4 The Internatinal Benhmarking Clearinghuse f the APQC supprts this view. It nludes that imprving press maturity in an rganizatin imprves finanial and nnfinanial perfrmane. 2-3

The mparative level f prjet management press maturity will help define hw effetive the LRD has been in implementing the requirements f ER 5-1-11. We dn't imply that an rganizatin must use the mst advaned prjet management tehniques n every prjet; instead, we evaluate hw wide-ranging the rganizatin's prjet management tl kit is. Fr instane, n a large lk and dam prjet, suh as Olmstead, a very rbust PDT is in plae with a sphistiated prjet management rganizatin and set f presses. Whereas, n a small "fast-burn" hazardus, txilgial, radilgial waste (HTRW) prjet, the shedule may nly be 5 weeks in duratin. The shrt shedule may ause the prjet manager t use nly the mst rudimentary prjet management tls and tehniques beause they are gd enugh t d the jb. Press Maturity Assessment DATA LLECTION The Berkeley prjet management maturity assessment tl evaluates "hw" prjet management is exeuted within an rganizatin. It addresses the tenets f prjet management thrugh inlusin f the PMBOK arss the life yle f a prjet. It is a rbust benhmarking tl designed, in ur ase, t mpare the LRD's prjet management maturity bth with its peers in the private setr and arss ther industries. The assessment tl uses statistial tehniques t assess the maturity f prjet management presses and praties amng different industries. The primary purpse f the benhmarking methdlgy is as a referene pint, r a yardstik, fr an rganizatin applying prjet management presses. It mpares prjet management strengths and weaknesses with ther rganizatins. It an prvide and guide the neessary presses and requirements needed t ahieve a higher maturity level, lead t suggestins abut an rganizatin's appliatin expertise, r prdue remmendatins n hw t hire, mtivate, and retain mpetent staff. The assessment tl and rrespnding database f 43 firms that have already partiipated in the prjet management benhmarking initiative enabled us t llet prjet management press data fr the LRD and then mpare it t the industry database best praties. The Berkeley methd enabled us t the apture the essene f the LRD's prjet management presses. The respnses t the questinnaire, whih has 161 multiple-hie questins, were made in a strutured gradatin, using a Likert sale (with 1 being the lwest level f prjet management maturity and 5, the highest) and related diretly t the LRD and distrits' prjet management. Appendix C gives an example f the detail and rigr f eah questin. We sent 4 questinnaires t eah f the 7 LRD distrits and reeived 24 respnses. 2-4

Press Maturity Assessment ASSESSMENT PROCESS RESULTS The bjetive f the survey was nt t btain a statistially defensible sample but a variatin amng the sample t avid bias when nstruting a piture f the LRD PPM prgram. It identified areas f interest fr us t prbe when nduting the fllw-n interviews. At the distrits, fr example, the results f the survey indiated a weakness thrughut the LRD in prjet risk management. We nduted an independent, third-party assessment using state-f-the-art prjet management business praties. As an independent entity, it is easier fr us t be bjetive when dealing with the many sensitive issues fund in an rganizatin underging a majr business ultural hange, suh as the Crps in its transitin t prjet management. When evaluating the LRD, we an dispassinately relate results, withut the pssible diffiulties an internal team may fae. In making ur mparisns, we used data lleted frm 43 firms in the engineering and nstrutin (EC), infrmatin management and mvement (IMM), infrmatin systems (IS), and high teh manufaturing (HTM) industries. By mparing the LRD t this ttal ppulatin f firms, we gauged where it stands in relatin t sme wrld-lass rganizatins. Appendix D lists these firms. We als defined a peer grup fr a mre detailed mparisn with the LRD. We seleted these firms beause they partiipate in large-sale nstrutin prjets as either wner r ntratr and, in many ases, perate as a regulated publi utility, similar t the Crps. The firms seleted as the LRD peer grup were Behtel Crpratins, Chevrn, NYNEX, Williams Gas Pipeline, and the Australian Army Engineering Ageny. LRD persnnel prvided the data we btained frm the surveys. In ases like this, persnnel tend t inflate their abilities and wrk presses. Befre mpleting the assessments, we reminded LRD persnnel abut the value f an bjetive selfassessment. We inrprated this issue in making ur analysis. Using the study t investigate speifi strengths and weaknesses in the distrits, we better assessed their level f PM maturity. Fr distrits with either high r lw respnses, fused fllw-up questins asked during the site visits prvided greater insight int their gd r pr business praties. We then mbined the varius distrit findings t reate a detailed piture f the LRD prjet management praties. The fllwing results summarize ur analysis f the maturity f the prjet management presses maturity fr the seven distrits within the LRD. Our bjetives were t analyze in detail the urrent state f the LRD's prjet management praties and identify pprtunities t imprve prjet management effetiveness. 2-5

Prjet Phases and Knwledge Areas The LRD prjet management press maturity index was 3.47, whih is slightly abve the average maturity f the ther 43 mpanies (at 3.26) in the Berkeley database. Figure 2-3 displays the ratings f the LRD and ther mpanies in the database. The mpany identities are hidden t prtet any mpetitive advantage they may enjy. In the figure, EC1 thrugh EC 18 represent the 18 EC mpanies, EVIM1 thrugh IMM12 represent the 12 EVIM mpanies, and s frth. Figure 2-3. LRD Prjet Management Press Maturity LULUWLULUOOOO UJ W LU HI CM * CD 00 CM C\l O t/> 1 "> X The mparisn t the general ppulatin f mpanies in the Berkeley database prvides a general sense that the LRD is perfrming better than thers but, mre imprtantly, shws that it has rm fr imprvement sine there were thers with higher verall sres. We next mpared the LRD t the peer grup we seleted. Figure 2-4 presents the results f this mparisn. The peer grup's maturity level was 3.73, superir t the LRD at 3.47. 2-6

Press Maturity Assessment Figure 2-4. LRD Prjet Management Press Maturity versus Peer Grup EC1 EC2 EC8 EC16 EC17 CE Figure 2-5 presents the detailed results f the distrit assessments mpared with the peer grup. The shaded bxes indiate areas in whih the LRD lagged behind its peers. Figure 2-5. LRD Distrit Results Cmpared with the Peer Grup in (0 a < O) T3 0) O 1 O m 0- CD >< Ü _l CD 's" 0. Area A B C D E F Overall Spe Management 3.25 2.70 3.74 4.09 3.93 3.83 3.64 Time Management 3.09 2.92 3.55 4.02 4.02 3.76 3.6 Cst Management 3.61 3.78 4.19 4.75 4.44 4.42 4.26 Quality Management 3.68 2.73 3.43 3.35 3.88 3.64 3.49 Risk Management 2.67 2.09 2.91 3.47 3.33 3.10 2.97 Cmmuniatin Management 3.25 2.62 3.52 4.08 4.01 3.75 3.6 Human Resures Management 2.63 2.19 3.22 3.46 3.78 3.33 3.18 Prurement Management 3.50 2.95 3.50 3.96 4.07 3.81 3.67 Integratin Management 2.92 2.36 3.43 4.15 3.81 3.74 3.46 Initiate 3.78 2.76 3.52 3.99 3.64 3.85 3.43 Define and Organize 3.41 2.99 3.61 4.47 4.38 4.09 3.87 Plan 2.82 2.32 3.22 3.65 3.85 3.48 3.29 Trak and Mnitr 2.94 2.55 3.47 4.02 3.63 3.57 3.4 Clse 2.88 2.61 3.57 3.67 3.82 3.47 3.33 Prjet-Driven Organizatin Envirnment 2.75 2.68 3.66 3.66 3.94 3.50 3.45 Overall 3.08 2.58 3.44 3.89 3.86 3.64 3.47 Peer Grup Delta (LRD-Peer) 4.15-0.51 3.86-0.26 4.28-0.02 3.15 0.34 3.35-0.38 3.81-0.21 3.44-0.26 4.04-0.37 3.67-0.21 4.27-0.84 4.13-0.26 3.54-0.25 3.65-0.25 3.54-0.21 3.63-0.18 3.73-0.26 The peer grup lumn in Figure 2-5 represents the average maturity assessment results f prjet management presses fr Behtel, Chevrn, Australian Army Engineering Ageny, Williams Gas Pipeline, and NYNEX. The "Delta" lumn represents the differene between the LRD average and the peer grup mparisn. 2-7

Althugh we were nerned primarily with the aggregate results fr the LRD and nt the speifi distrits (due t the small sample taken at eah distrit), we prvided the distrit results t shw the signifiant variability amng distrits. We have masked the distrit identities and mbined tw f them, due t sme missing surveys, fr a ttal f six distrits, designated as "A" thrugh "F." Figure 2-6 presents the distrit side-by-side mparisns. Figure 2-6. LRD Distrit Cmparisn f Press Maturity Level Analysis f Results QUALITY MANAGEMENT In ur analysis, we find any differene with a value greater than 0.30 as signifiant and warranting additinal investigatin. The results, presented in Figure 2-5, are quite errati, bth within eah f the distrits and between them. These errati presses mpliate rdinatin between prjets and mmuniatin between ffies. Our findings frm this survey highlight key management press areas where the LRD sres signifiantly abve r belw the peer average higher in quality, and lwer in spe, risk, and prurement management, and in the initiate phase f a prjet. As defined in ur study, quality management refers t meeting r exeeding the needs f the lient and inludes all ativities f the verall management funtin that determine the quality pliy, bjetives, and respnsibilities. It implements them by suh means as quality planning, quality ntrl and assurane, and imprvement within the quality system. The LRD sred high in this area, mst likely as a funtin f the strng management fus n quality prduts and ustmer satisfatin fund in the Crps' ulture. 2-8

Press Maturity Assessment The results f ur assessment shw that althugh quality management des indeed sre high, the fus may be partially misplaed in that nly the prdut, and nt neessarily the press by whih the distrits manage prjets, is nsidered. We address this issue in the next hapter in ur disussin f defining perfrmane suess within the LRD. We are pleased t see that the Crps' new 5-1-11 pliy dument takes a strng perfrmane and press-riented perspetive in defining USACE business praties, inluding quality and prjet management. SPE MANAGEMENT Spe management nsists f spe planning, spe definitin, spe verifiatin, and spe hange ntrl. It was in this area that the LRD sred signifiantly lwer than the peer grup. Fr example, we fund that the pririties between individual prjet bjetives were nly infrmally defined and dumented and that the PM, rather than the PDT, nly infrmally duments the existene f the apprpriate prjet heklists (suh as ne fr prjet initiatin). PROJECT RISK MANAGEMENT Prjet risk management is anther area in whih LRD sred belw the peer grup. It is a press that seeks t maximize the results f psitive events and t minimize the nsequenes f adverse events by identifying, analyzing, and respnding t prjet risk. Risk identifiatin, quantifiatin, respnse develpment, and respnse ntrl ativities are used in prjet risk management. Fr the LRD, the survey assessment results indiated there was n nsistent pratie f develping, dumenting, and distributing a mprehensive prjet risk management plan. Fr instane, risk management praties inlude the identifiatin f at least ne ntingent atin, assigning an wner and defining a trigger mehanism fr eah f the tp risk areas in a prjet. We fund very few respndents develped ntingeny plans and assigned wners. It is als imprtant t nte that the LRD, and the Crps, are nt the nly rganizatins t sre lw in this area. The private setr is struggling with hw and when t apply risk management t their prjets fr instane, in the peer grup f this study, the risk management sre is the send lwest at 3.35. This type f result, indiative f industry's diffiulty in dealing with prjet risk management, spurred the PMI t mpletely rewrite the risk hapter in its new versin f the PMBOK ntable in that this was nly ne f the majr revisins in the new PMBOK dument. PROCUREMENT MANAGEMENT Prurement management inludes the prurement planning, sliitatin planning, sliitatin, sure seletin, ntrat administratin, and ntrat lseut ativities assiated with the life yle f a prjet. 2-9

INITIATE PHASE ST MANAGEMENT Fr prurement management, the LRD des indeed have a fairly rbust and innvative reginal ntrating bard that helps level the ntrating resures. It allws the distrits t use the apaity f a ntrat vehile frm a distrit ther than their wn allwing mre flexibility and better use f resures thrughut the RBC. We did find that the distrits, during prjet develpment and initiatin, nly infrmally nsider market nditins fr the prurement f prjet servies (planning, design, nstrutin) but d nt dument these nditins. The initiate phase analyzes the feasibility and staging f the prjet, and examines the pssibility f applying a systemati apprah fr prjet planning and managing. This area is imprtant beause it sets the tne fr all subsequent phases f the prjet. The LRD's maturity in this area is extremely lw. Fr develping new wrk, we disunted sme f the delta sine the LRD, in general, reeives its wrk thrugh the legislative press the ability t hse prjets is limited. But under the auspies f the utreah prgram r ustmer partnering arrangements, mre attentin t prpsal develpment and planning shuld be made. The remainder f the delta is explained in part by the fllwing: Final reprts (pst-mrtems, lessns-learned) f similar, previus prjets are nt nsistently reviewed. Only an infrmal analysis and dumentatin f rganizatin pririties and strategy are made fr sme prjets. Suess and failure riteria (suh as tlerane) fr the prjet are nt always identified and dumented, and when they are, it is dne infrmally. Only an infrmal analysis and dumentatin f pssible tls r tehnlgies are made fr eah prjet. The bjetive f prjet st management is t ensure that the prjet is mpleted within the apprved budget. It nsists f resure planning, st estimating, budgeting, and ntrl. The primary nern f st management is dealing with the st f resures needed t mplete prjet ativities. The LRD sred highest in this PMBOK area, with a sre f 4.26, and relative t the peer grup, the LRD was essentially at the same sre. 5 This result is nt surprising due t the Crps' strng fus in managing-t-budget and the key metris used t measure perfrmane, namely finanial perfrmane measures. But, as we 5 The differene was nly 0.02 in the sres, with LRD at 4.26 and the peer grup at 4.28. 2-10

Press Maturity Assessment Distrit Visits disuss in Chapter 3, fusing nly n finanial perfrmane des nt give a full piture f the LRD's perfrmane in prjet management. The Berkeley prjet management press maturity assessment tl was step ne f the tw-step press in defining LRD's perfrmane in prjet management. By disaggregating prjet management int the 9 PMBOK press areas arss the 6 prjet phases, we were able t explre the mplex arena f prjet management as it relates t the LRD. The survey tl results gave us a feel f hw t target ur fllw-up visits t the distrits t validate these findings and explre additinal areas we unvered during the site visits. Appendix E ntains a typial distrit visit questinnaire, whih we tailred fr eah site visit t reflet the results f the maturity assessment. By building n the results f the Berkeley survey tl and the distrit visits, Chapters 3, 4, and 5, present additinal findings and nlusins, and develp speifi remmendatins that deal with the PMBOK fus areas and the prjet life yle phases. All f the findings in this hapter are inrprated int remmendatins in the fllwing hapters. 2-11

Chapter 3 Linking Strategy t Exeutin INTRODUCTION Single Prjets Multiple Prjets T sueed, an rganizatin must link its strategi fus and diretin diretly t the exeutin f its prdut r servie. Wrld-lass firms rutinely develp strategi gals and bjetives that asade dwn thrugh their prdutin, marketing, and sales perating plans. The strategi gals and bjetives f the Crps shuld likewise asade dwn thrugh the framewrk f the PMBP t the exeutin f their perating plans. There are tw imprtant faets f this linkage: the individual prjet perspetive and the management f many prjets simultaneusly with the PMBP integrating the tw perspetives. Frm the prjet management perspetive, the identifiatin and integratin f the myriad prjet management philsphies, presses, ativities, and issues are highly mplex and diffiult undertakings. The Crps traditinally uses the PMBP t desribe bth a business philsphy and an exeutin methdlgy fr managing the delivery f a single prjet. Initiative 88 started the frmal evlutin f the Crps frm a funtinal, stvepiped engineering and nstrutin (E&C) entity t ne perating mre like an rganizatin with a mdern prjet management business rientatin. But, as with many hange management issues within a large gvernment rganizatin, the initiative beame bgged dwn and its gals bsured; there still remained a large E&C funtinal pwer base within the Crps. Realizing that the transitin was in truble and that hange was ming very slwly and needed a push, the Chief f Engineers prmulgated the urrent Crps' strategi visin and gals and published ER 5-1-11 in early 1998. This dument prvided the urrent strategy under whih the Crps perates its business and set the stage fr this study t determine hw well the LRD has dne in meeting the gals and bjetives f ER 5-1-11. The ther ritially imprtant aspet f linking strategy t exeutin urs within the distrit's rprate bard, speifially in hw it manages its prjet prtfli and exeutes its prjets simultaneusly. Althugh the management f a prjet is a very imprtant element f a suessful Crps, suess in meeting the perfrmane requirements f ER 5-1-11 annt be attained withut an effetive 3-1

and effiient distrit prtfli management prgram. The ability t effetively manage multiple prjets simultaneusly with an effiient allatin f resures is key t suessfully meeting the strategi gals f imprved prjet perfrmane and ustmer satisfatin. We have rganized the next three hapters t deal with the tangible, psitive initiatives that the LRD an implement t raise its maturity t a level mmensurate with the mst apprpriate best-in-lass praties f the private setr and ther agenies steps that an imprve their verall prjet perfrmane. This hapter, building n the findings and nlusins f the assessment survey presented in Chapter 2, presents ur findings, nlusins and remmended hanges r enhanements t the PMBP in the LRD distrits. 1 This hapter fuses n the single prjet perspetive f the PMBP. In Chapter 4, we take the management f multiple prjets perspetive f the PMBP and disuss issues and make remmendatins fr effiiently and effetively allating resures t the distrit's prjet prtfli. Chapter 5 lays the framewrk fr a perfrmane management prgram fr the LRD distrits t measure their perfrmane at the prjet and prtfli levels. Chapter 6 presents a tentative implementatin plan inrprating the remmendatins f Chapters 3, 4, and 5. FINDINGS AND NCLUSIONS T be effetive, ageny leadership must develp strategies that align the resures, utputs, and tasks f the rganizatin with the needs f the publi: they must be transfrmed int speifi atins and peratins. The Chief f Engineers' strategi plan establishes the lng-term diretin f the Crps in the ntext f a visin f the future, a unique missin, and a speifi set f gals, bjetives, and pliies develped in respnse t ustmer requirements, external mandates, and external and internal envirnments. Our perfrmane questin (see Figure 1-1) reflets the upling f the strategi diretin f the Crps t imprved prjet delivery perfrmane. The Chiefs strategi plan, knwn as the RPS PLUS Strategy, has three gals: Revlutinize effetiveness. Best business praties, bld press reengineering, and innvative use f tehnlgy will dramatially imprve perfrmane and ustmer satisfatin. Seek grwth pprtunities. Grwth will be strategially targeted t meet emerging Army and natinal needs, sustain and enhane re mpetenies, and maintain full-spetrum apabilities ritial t the Army. 1 Fr this study, we envisined the PMBP as a synthesized, interdependent gruping f many different presses and ativities designed t deliver prjets effiiently and effetively. Our visin f the PMBP inludes strategi and tatial appliatins, predures, and ativities. 3-2

Linking Strategy t Exeutin Invest in peple. Enlightened leadership and a talented, prdutive, and diverse wrk fre will enable the Crps t enhane its value t the Army and the natin. 2 During ur site visits, we fund a wide variatin in hw the distrits inrprate the gals and bjetives f RPS PLUS int their prjet delivery presses. Sme distrits, in meeting the first gal f the strategi plan, pratively utilize the philsphy f business press imprvement and inrprate best praties. Fr instane, Luisville was atively invlved in the ISO 9000 press and wrking t integrate the prjet management, engineering and nstrutin business areas; Huntingtn reently initiated the ISO press and Pittsburgh is ntemplating starting the press. In a similar fashin, Huntingtn and Nashville mpeted in prgrams mdeled n the natinal Baldrige award riteria t review their presses and perfrmane. In addressing the send gal, we fund that distrits had reatively wrked effetive partnerships with their ustmers t enhane prjet suess. Buffal's and Detrit's partnerships with the EPA, Nashville's initiative t rganize arund its ngressinal distrits, and Chiag's partnership with fur f its key ustmers are examples; the aunt exeutive prgram thrughut the LRD appears t be wrking. In Detrit, we fund a strng fus n prjet management mpetenies and a new training prgram being implemented. But, it was lear during ur site visits that the distrits are fairly autnmus in their management and, sine there are n standard prjet management business presses in plae thrughut the LRD, they d nt neessarily share best praties effetively and, as a result, develp their wn business presses. In sme ases, management seemed t understand the strategi linkage with prjets, but in ur disussins with prjet delivery team (PDT) members, there was a disnnet the team members did nt always see hw their prjet fits within the strategi plan r aim f the Crps, LRD, r distrit. These examples demnstrate a breakdwn in mmuniatin bth within and between distrits. PROJECT MANAGEMENT BUSINESS PROCESSES Sine 1998, the PMBP has been desribed as the verarhing business framewrk that drives all f the Crps' business presses. During ur distrit site visits, we fund nfusin as t what the PMBP nsisted f sme distrits had a welldumented press fr managing the delivery f prjets, thers used a number f different management presses. Many times this was a funtin f the style and experiene f the individual PM r speifi prgram. In the end, we fund it very diffiult fr the distrits, and LRD in the aggregate, t measure the suess f their prjets and management presses. 2 Adapted frm US ACE, "Gals" [n-line dument], ited August 2000. Available frm http://www.usae.anny.mil/ess/visina/mastateg.htm. 3-3

The LRD prjet prtfli is large and mplex, hallenging the distrits in delivering the prjets within st and sheduling nstraints. While lleting data, inluding the benhmarking analysis and distrit visits, we develped a wide range f findings and nlusins regarding LRD prjet management. Overall, while the LRD effetively manages prjets, there are many areas in whih it an signifiantly imprve its prjet management business praties, thereby inreasing press maturity and, by extensin, its perfrmane. Cntinuus imprvement is a key harateristi f the best-in-lass firms. The fllwing findings in the LRD prjet management praties have the mst ptential fr streamlining and imprvement: The appliatin f PMBP varies widely thrughut the LRD distrits: > The Berkeley assessment tl's mpetitive benhmarking analysis identified a wide variatin amng the distrits, with the distrit prjet management press maturity indexes ranging frm a high f 3.89 t a lw f 2.58 (n a sale f 5.0). > Cmprehensive prjet management plans are nt well develped initially and prly used thrughut the prjet. Pririty f individual prjet-level bjetives is nly infrmally defined and dumented. > Suess and failure riteria fr the prjet are nt always identified and dumented, and, when they are, it is dne infrmally. Sme distrits use the lassi st and shedule riteria as their sle measure f perfrmane suess. > The LRD des nt effetively use available tls, suh as earned value management r trend analysis, t trak the perfrmane f prjets with respet t st and shedule. > Prjet management dumentatin is nt written t the standards f best-in-lass firms. > Lessns-learned are nt effetively disseminated r used in develping the prjet. Final reprts f similar, previus prjets are nt nsistently reviewed. > Sme LRD distrits are invlved in the ISO 9000 ertifiatin press t measure perfrmane against stated gals. They are investigating hw best t use the PMBP as the integratin tl fr the prjet delivery phases (planning, design, nstrutin, peratin, and maintenane). 3-4

Linking Strategy t Exeutin Appliatin f PMBP There is n expliit fus n prjet risk management. Prjets d nt inlude develpment, dumentatin, and distributin f a mprehensive risk management plan. Develping prjet-level authrity is diffiult thrughut the LRD. N effetive prjet management infrmatin system is in plae t supprt PMs. The lak f a perfrmane suess definitin and an assiated perfrmane measurement prgram greatly restrits the LRD's ability t identify and develp imprvements in prjet management. Prjet management mpetenies vary. > In many distrits, the rles and respnsibilities f the PM and the PDT are unlear. > Transitin f prjet management respnsibilities during the nstrutin phase is nfusing and unlear. > N systemati prgram exists fr reruiting and training prjet management prfessinals and PDTs. Remnants f the E&C stvepipe still remain in the nstrutin phase f a prjet. As presented in Chapter 2, the prjet management press maturity and prjet management press implementatin varies extremely amng distrits. In many instanes, this stems frm the autnmy f the individual distrits and rrespnding lak f presribed standard prjet management pliies and praties. Many distrits left press definitin up t their PMs and PDTs, a risky endeavr beause prjet suess then depends whlly n the mpetene f the PM and the PDT. Fr example, during ur interviews, sme distrit team members said they were unsure f their rles as they mved frm team t team sine eah PM perated differently. This seemingly insignifiant lak f learly defined rles and respnsibilities reates nfusin, ineffiient use f resures, and a breakdwn in mmuniatin, t name a few f the pssible prblems. This lak f understanding r buy-in by the wrk fre was ne f the greatest barriers t hanging the Crps prjet management business praties. The wrk fre still wrking under past, mfrtable business strategies did nt understand r trust the new visin requiring the transitin t a prjet management philsphy as it beame established. This disnnet aused planning, engineering, and nstrutin t ntinue t imprve their wn smetimes-effiient presses at the risk f nt respnding t the strategi signals abve them. There was n integrated, synthesized apprah t delivering wrk t the ustmer. 3-5

Defining Perfrmane Suess The distrits vary widely in their definitin f perfrmane suess and exeutin f mdern prjet management. Sme viewed suess as meeting time and st targets, sme inrprated ustmer satisfatin, and sme did nt expliitly measure their suess in mpleting prjets. In the past deade, the understanding f prjet management has hanged and matured as mre pratitiners refined and applied its tenets. The lassi view f prjet management perfrmane suess fusing n the st and time aspets f a prjet has hanged signifiantly. N lnger an we define suess nly in terms f st and shedule. We must address a muh wider range f needs, nerns, and issues presented by a diverse mix f stakehlders. The mst reent hanges within the industry, manifested in the new PMBOK expsure draft, demnstrate this shift. 3 In this editin, key hanges in the prjet management field inlude (1) aknwledgement f the rle f the prjet ffie, (2) expanded treatment f earned value, and (3) a mplete rewrite f the risk management hapter. The PMBOK, as the newly apprved ANSI natinal standard fr prjet management, has a deidedly team-fused perspetive, nfirming that suessfully managing a prjet invlves mre than just lking at st and shedule. Althugh st and shedule are ppular measures f suess (sine they are easy t measure and remain within the realm f the prjet rganizatin), they an be smewhat misleading and d nt prvide the mplete perfrmane piture. As the definitin f prjet suess has beme mre mplex, it inrprates many f the ther areas f the PMBOK, with a fus n the "sft skills" f prjet management: ustmer satisfatin, teamwrk, and mmuniatin. These hanges are part f the new "mdern" prjet management. In measuring suess, tw distint mpnents must meet r exeed the stakehlders' expetatins: Prdut suess, whih fuses n the effets f the prjet's final prdut, deals with the gal and purpse f the prjet. Prjet management suess fuses n the prjet (suessful amplishment f st, time, and quality bjetives) and the manner in whih the prjet management press was nduted. This versin was prmulgated in April 2000 fr review and mment. The PMBOK has evlved signifiantly sine PMI published its initial standards in 1983. The 1996 versin aknwledged the imprtane f integratin f the PMBOK areas, refined the fus n prjets, and highlighted the prjet life yle. 3-6

Linking Strategy t Exeutin Risk Management In ur definitin f prjet suess, meeting the gals and purpse f the prjet are as imprtant as hw the press was mpleted. Nt ne distrit we visited has an effetive pliy f prjet risk management. Eah had ways f dealing with varius types f risk, mst ntably design risk, but n ustdian f risk had "wnership" r respnsibility fr risk management r the neessary tls t manage it. Under PMI's newly rafted definitin, risk management is the "systemati press f identifying, analyzing, and respnding t prjet risk, inluding the maximizatin f the prbability and impat f psitive events and minimizing the nsequenes f events adverse t prjet bjetives." 5 This invlves the interdependent presses f risk management planning; identifiatin, assessment, and quantifiatin f risk; risk respnse planning and mnitring; and ntrl. Examples f prjet risk inlude a lak f tehnially qualified PDT persnnel, inadequate funding, r a remte prjet site latin. Mitigating fatrs uld inlude an enthusiastially supprtive ustmer, an innvative tehnial slutin, r a highly mpetent ntratr. In managing these wide-ranging perspetives f risk, many best-in-lass firms emply risk "stewards" as their experts in handling risk, staying abreast f the best praties in risk management, and helping prjet teams apply a suitable level f risk management tehniques t inrease the prbability f prjet suess. Prjet Management Infrmatin System The prjet management infrmatin system in use at the time f ur study, knwn as PROMIS, 6 is t rigid and umbersme. It is a "ne-size-fits-all" design, requiring the same detailed level f infrmatin fr small and large jbs. In additin, PROMIS des nt prvide adequate prjet-level supprt fr the PM; distrit management uses it primarily as an upward reprting tl. Eah distrit has a strng need fr a prjet management infrmatin system that supprts the PM and the PDT. 4 David Baarini, "The Lgial Framewrk Methd fr Defining Prjet Suess," Prjet Management Jurnal, Vl. 30, N. 4,1999, pp. 25-32. 5 Prjet Management Institute, PMBOK 2000 Editin, Expsure Draft, June 2000. 6 Data entry int PROMIS halted during the urse f ur study, and an initiative fr pruring a state-f-the-art prjet management infrmatin system was started. The new system, P2, is expeted t be nline in mid-2001. 3-7

Perfrmane Management System One f the rnerstnes f an effetively run rganizatin is the ability t measure perfrmane and take rretive atin in areas that are under-perfrming. In general, the distrits d nt have a perfrmane bjetive with respet t managing multiple prjets r at least ne fusing n mre than just st and shedule. The extremely strng fus n budget exeutin is subptimizing, and in sme ases, atually reduing, prjet prtfli perfrmane. Fr example, the requirement t exeute a distrit's ivil wrks 2101 budget n a "first-in, first-ut" basis fr prjets may nt allw the "right," r highest pririty, prjets t be mpleted in the ase f a funding shrtfall. If the prjeted funding fr the year des nt materialize r is ut bak (as happened this year with nstrutin general funding), then high pririty prjets still in the pipeline may be stpped, whereas lesser pririty prjets may have already been awarded sine funding was available. This fres a nentratin f effrt n prgram exeutin t the detriment f ther prjets that might be better aligned t strategi gals. Prjet-Level Authrity A PM's suess is a funtin f bth de jure (by law) and de fat (in fat) prjet authrity. The frmer is the legal r rightful pwer t mmand r at in the management f a prjet. In this ase, the PM an mmit r withdraw resures with a legal authrity usually granted in writing and inluding the mplementary rles f ther managers (funtinal managers, general managers, et.) The latter represents the influene brught t management f a prjet by reasn f a partiular persn's knwledge, expertise, interpersnal skills, r persnal effetiveness. Organizatinal knwledge, the ability t mmuniate (interpersnal, presentatin, and publi speaking), nflit management, negtiatin, writing, mpetene in wrking effetively with ther funtinal managers and stakehlders, and tehnial skill in the tehnlgy embdied in the prjet are all part f the PM's de fat prjet authrity. The distrits vary widely in their prjet authrity, mst ntably in de fat authrizatin, whih is primarily a funtin f the prjet management mpetenies within the distrit rganizatins. We address this issue belw. Prjet Management Cmpetenies The distrits d nt identify, develp, r maintain prjet management mpetenies. This shrtfall inludes the apability f the rganizatins t reate an envirnment enabling individuals and teams t arry ut their jbs effetively, the effetiveness f teams in harnessing the rss-funtinal perspetives needed t reslve the mplex prblems typially enuntered in distrit prjets, and the apability f individuals t identify and slve prblems. 3-8

Linking Strategy t Exeutin REMMENDATIONS N single hange r remmendatin will signifiantly imprve the LRD's prjet management press maturity perfrmane beause the issues are pervasive and ultural: reslutin will invlve the effetive integratin f bth shrt- and lng-term fixes. Our remmendatins all invlve the business f prjet management sine that is the Crps' stated methd f prjet delivery. Fr the LRD t suessfully deliver prjets t the ustmer, the PMBP must be the bedrk presses that gvern all wrk and it must address issues related t management f bth single prjets and multiple, simultaneus prjets. The fllwing subsetins utline the varius elements f a remmended PMBP fr use in the LRD distrits. We remmend an integrated and synthesized apprah, ne that blends the hard and sft issues f prjet management int a suessful prgram. Suessful implementatin f these remmended hanges requires (1) supprt f prjet management frm senir management, (2) an envirnment that supprts prjet management and perfrmane measurement, (3) dumentatin and disseminatin f best praties, and (4) a general awareness f prjet management nepts thrughut the LRD. We remmend the fllwing: Clarify the linkage between the strategy and prjet exeutin. Determine prjet suess fatrs. Define the PMBP fr > multi- and single-prjet envirnments, > large and small prjets, and > entralizatin f resures under the PM. Develp a risk management prgram fr the distrits. Investigate the use f llabrative prjet prtals. Establish lear rles and respnsibilities. Investigate LRD's mpeteny in prjet management. Establish a prjet supprt ffie. Cntinue t benhmark prjet management servies. 3-9

Strategy and Prjet Exeutin We remmend the LRD implement an effetive PMBP designed as the nly way the LRD mpletes wrk thrughut the divisin t help meet the RPS PLUS strategi gals and bjetives. Figure 3-1 presents the interrelatinship between strategi, prjet, and peratinal management with the prjet management business presses perating as the integratin agent between the rprate strategy and distrit peratins. Using the PMBP philsphy, the prjet plans develped by the distrits fr eah prjet shuld reflet the gals and bjetives f the Crps' and LRD's strategi diretin. Likewise, the peratinal plans and rrespnding resure plans shuld reflet the needs f eah f the distrit's prjets. There shuld be a rrespndingly strng relatinship between the prjet and resure plans. Translatin f the Crps strategi gals int an effetive implementatin plan signifiantly hallenges the LRD and its distrits. Defining a lear prjet management business press that artfully blends the tehnial issues f prjet management (suh as st and shedule ntrl) and the sfter issues (human and rganizatinal behavir) is diffiult. In the fllwing setins, we utline ur apprah t defining an effetive PMBP framewrk that will enable the LRD and its distrits t suessfully ahieve imprved perfrmane. Chapter 4 will address the use f effetive prtfli management and resure allatin. Figure 3-1. Relatinship f Strategi, Prjet, and Operatinal Management Prjet Management H=I> Prjet Crprate, Strategy Planning T US ACE Multiprjet Engineering and Design I Cnstrutin T Operatins and Maintenane u D> Resure Operatinal Plans 3-10

Linking Strategy t Exeutin In Figure 3-2, we present the interdependenies f strategi management, the PMBP, and perfrmane management frm a tp-level perspetive. The figure shws hw the presses and ativities f the PMBP flw frm the distrit's strategi management ativities and link t individual prjet exeutin, with the management infrmatin system and perfrmane measurement prgram prviding feedbak t the distrit fr evaluating hw well it is ahieving its bjetives. Figure 3-2. Linkage f Strategi and Tatial Perspetives f the PMBP Strategi management Establish strategi diretin Strategi planning Operatinal planning Multiprjet Management We remmend that the PMBP, at the MSC and distrit levels, prvide a lear linkage between the strategi plans and the prjets that the LRD exeutes. It shuld set frth lear pliies, standards, and guidelines fr the distrit t review, and it shuld inrprate perfrmane suess and measurable riteria, business presses and interfaes with ther systems and management areas, rles and respnsibilities, and mpetenies. In additin, the LRD and distrit leadership must ensure these imprtant perspetives are mmuniated t, and understd by, the PDT members. 7 We use this same framewrk t intrdue the prtfli management prgram in Chapter 4. 8 We remmend using a meta-rules (r mre mprehensive, glbal diretives) management mdel that fuses n the utilizatin f general guidelines implemented by autnmus PMs wh are whlly auntable fr a prjet's suess. In a prjet management system like this, a PM must interpret and apply the prjet management guidelines t the unique irumstanes f the prjet. The PMBP shuld be designed t allw this ritial flexibility and ffer guidelines n hw t d this. 3-11

Prjet Suess Fatrs One f the first steps in establishing the perfrmane linkage is t identify what fatrs influene the suess f a prjet r the prjet management press. Understanding the fatrs and harateristis f suess, the LRD and the distrits will be able t better manage their prtfli f prjets. Fr instane, knwing that having learly defined gals and bjetives fr a prjet (linked in sme manner t the strategi plan) will inrease the hanes f suess, the PM will inrprate this nept int the prjet planning and perfrmane measurement. Table 3-1 shws a sample f typial fatrs nsidered ritial t the suessful mpletin f a prjet and related t issues that the prjet team r parent rganizatin an ntrl r influene. These fatrs span the PMBOK areas and prvide sme insight int what drives suess in the private setr. Table 3-1. Critial Prjet Suess Fatrs 1. Clearly defined gals and general diretin frm the start 2. Willingness f tp management t prvide the neessary resures and authrity/pwer fr prjet suess 3. A detailed speifiatin f the individual atin steps fr prjet implementatin 4. Cmmuniatin and nsultatin with and ative listening t all impated parties 5. Reruitment, seletin, and training f the neessary persnnel fr the prjet team 6. Availability f the required tehnlgy and expertise t amplish the speifi tehnial atin steps 7. The at f "selling" the final prjet t its ultimate intended users 8. Timely prvisin f mprehensive ntrl infrmatin at eah stage in the implementatin press 9. The prvisin f an apprpriate netwrk and neessary data t all key atrs in the prjet implementatin 10. The ability t handle unexpeted rises and deviatins frm the plan Adapted frm Jeffery K. Pint and Dennis P. Slevin, 'The Causes f Prjet Failure," IEEE Transatins n Engineering Management, Vl. 37, N. 4, Nvember 1990, pp. 269-276. We remmend that the LRD fus n these, r a mdified list f, suess fatrs in develping its PMBP and related praties sine they address the tenets f mdern prjet management disussed earlier in this hapter. Fr example, many f the fatrs an be seen in the ativities f the PMBP we lay ut belw, while thers are imprtant t the risk management prgram we remmend. Als, these fatrs will lay the grundwrk fr establishing the integrated perfrmane management prgram and measures. These fatrs will haraterize the key ativities that the LRD and distrits use t exeute their wrk and meet the gals and bjetives f ER 5-1-11. 3-12

Linking Strategy t Exeutin Other fatrs influene prjet suess and shuld be addressed by the rganizatin, PM, and the PDT in develping the prjet management plan and prjet risk management plan. We remmend that the LRD and distrits als inrprate these fatrs int their PMBP: Charateristis f the prjet team leader Pwer and plitis within the rganizatin Urgeny f the prjet Client and wner's representative (nature f lient, nature f expetatins, level f sphistiatin, nature f relatinship with ther members f team, et.) Prjet harateristis (site nditins, buildability, quality f design, quality management predures, and aess t site) Envirnmental harateristis (gegraphi latin, physial envirnment, enmi nditins, siplitial nditins, and industry relatins) Prjet Management Business Presses The PMBP is the heart f the distrit prjet delivery peratin r at least it shuld be. We remmend that the LRD and distrits standardize their PMBP t detail multiprjet and single-prjet senaris. Althugh eah distrit has its wn ulture, using mmn prjet management standards will benefit the entire LRD. It prvides the perfet vehile fr integrating prjet management and funtinal wrk ativities f the planning, engineering and design, and nstrutin divisins. It failitates management f resures and wrklad n prjets shared amng distrits and results in better infrmatin lletin, evaluatin, and resure allatin within distrits and the LRD. Press wners and key stakehlders, primarily the distrits, must be invlved in develping and establishing their prjet management business presses. Our remmendatins are internneted and shuld be viewed lletively. Sme remmendatins may be aepted and sme may nt the distrits will deide whih are wrth pursuing. We remmend that the distrits fus n develping prjet management standards in the areas f press flws, perfrmane measures, rles and respnsibilities, risk management, and prjet management mpeteny. 3-13

MULTIPROJECT MANAGEMENT PROCESSES Figure 3-2 shws the flw frm strategi management t prjet management. Inherent in this relatinship is the management f multiple simultaneus prjets. While mst f the Crps pliy fuses n hw t manage a single prjet (as we d in the next subsetin), we remmend that multiprjet management be evaluated and inrprated int the LRD PMBP philsphy, pliies, manuals, and standard perating predures. Figure 3-3 presents a mre detailed view f hw the single- and multiple-prjet envirnments must interfae fr effetive and effiient peratins. The strategi, r multiprjet, level gives the strategi diretin fr eah f the individual prjets t fllw, inluding prjet priritizatin within the distrit's prtfli, resure allatin fr exeutin, and varius management ntrls. Initially, the ustmer submits a prjet requirement fr the Crps t exeute. During the subsequent nept develpment phase, the distrit prepares the initial prjet dumentatin fr funding and prjet apprval purpses. Figure 3-3. Relatinship f Multiprjet Management and Individual Prjet Management </> O (0 (0 fl> Q. 0) E 0) O) (0 (0 5 Strategi (Multiprjet) Level Prjet Management Level Cnept Prjet's management plan Planning HgMevel planning High-level plan (priritized) > Strategi planning and ntrl US ACE Prjet Life-Cyle Phases (Typial) Evaluate, ntrl {täte rretive atin) K Mnitr high-level mnitring perfrmane Prdut; Team Planning Engineering and Design Operatinsand Maintenane Adapted frm Rdrigues, Alexandre, "SYDPIM A System Dynamis-based Prjet- Management Integrated Methdlgy: Integrating System Dynamis Prjet Mdels with PERT/CPM Tls," Wrking Paper, June 1998. 3-14

Linking Strategy t Exeutin INDIVIDUAL PROJECT MANAGEMENT PROCESSES When the tp-level prjet priritizatin plan is prmulgated, the detailed prjet management planning is initiated in njuntin with the traditinal prjet planning. During this prjet management planning phase, the mst imprtant deisins are made, r at least disussed, t put the prjet n its best pssible fting. Als, the key prjet elements are established. Typially, a mpetent PDT is seleted, prjet gals and bjetives are agreed upn, expetatins set, and, mst imprtantly, risks identified and prblems in exeutin antiipated. These ativities prepare a radmap fr prjet exeutin sine many prjets are years in duratin and the PDT needs a plan t fllw and mdify as the prjet prgresses. Appendix F ntains a press flw hart that identifies the key prjet management business press ativities, at the prjet level. Our framewrk uses an array f the nine PMIPMBOK areas, listed dwn the left side f the hart, and maps them t the varius ativities f the PDT (fr the nept and planning phases). We make a distintin here in that the multiple delivery phases f a prjet namely planning, engineering and design, nstrutin, and peratins and maintenane will all exhibit ertain aspets f the prjet management planning phase. 10 Fr example, the prjet planning phase in ivil wrks may treat a rennaissane study as a prjet with all f the ativities identified in Appendix F vered. Similarly, the design phase will have all f these attributes. As the prjet mves int the exeutin phase (planning, engineering and design, nstrutin, and peratins and maintenane), the PMBOK areas are still in plae and the prjet management ntrl lp invked (see Appendix F). This mnitring, evaluating, and ntrlling yle is in plae thrughut the prjet life yle after the prjet management planning phase sets the baselines, r standards. During exeutin, the PDT evaluates the prjet's perfrmane and the prjet management press perfrmane. If perfrmane is nt as expeted, it shuld identify the ause f the prblem and take rretive atin. Figure 3-4 presents the generi ntrl lp. 9 Managing risk at the prjet level will ultimately enhane the distrit's prjet perfrmane. Likewise, managing risk in the distrit's prjet prtfli will imprve its ability t effetively allate resures arss multiple prjets. We address this issue in Chapter 4. 10 See Appendix G fr ivil wrks and military prgrams prjet delivery press harts. In these harts, we desribe the varius ativities required in eah phase f the prjet. Althugh sme f the ativities are managerial in nature, they mst ften represent ativities f the funtinal divisins within a distrit. 11 During the establishment f the prjet management prgram thrughut the Crps, a traditinal sure f PMs was the engineering divisin in the distrit sine it rutinely handled prjets and managed them thrugh its phase f wrk. 3-15

Figure 3-4. Prjet Management Cntrl Feedbak Lp fr Use During the Exeutin Phase f a Prjet Take rretive atin A ^ Perfrmane w standards Evaluate atual perfrmane; identify ause ^,, Observe perfrmane Prjet managers must plan fr the unexpeted, espeially in the resurenstrained envirnment in whih the Crps and LRD perate. The new PMBOK "establishes ntrl as the inherent press f prjet prgress. The [PDT] will adapt and the shedule will hange ardingly: they will re-plan, re-exeute, and re-assess until prgress is aeptable r milestnes met." 12 INTEGRATION OF PERSPECTIVES The integratin f the prjet-level business praties and strategi prtfli management int the prjet delivery press frms a self-ntained system f systems that the distrits an develp and implement immediately. We fund several distrits either wrking tward, r ntemplating the start f, the ISO 9000 quality management ertifiatin press. In additin, several distrits were using the Army Perfrmane Imprvement Criteria (APIC) prgram r its ivilian unterpart, the Mallm Baldrige Award prgram at the state level, t help them fus n ntinuus imprvement and t blend their quality management and business presses. The new 5-1-11, US ACE business presses, ffers a lient-fused apprah t quality and teamwrk, whih prvides a mehanism t institutinalize the PMBP presses. The LRD is in an exellent psitin t take a leadership rle in the Crps t help shape the future: it is already taking many f the neessary steps. Karen L. Brwn, "Analyzing the Rle f the Prjet Cnsultant: Cultural Change Implementatin," Prjet Management Jurnal, Vl. 31, N. 3, 2000, pp. 52-55. 3-16

Linking Strategy t Exeutin PROJECT SIZE The PMBP shuld differentiate between different prjet types r prjet sizes. In general, prjet management presses shuld be standardized, but the presses used n a large prjet shuld differ frm the presses fr a smaller prjet. This key differene drives many resure deisins. Fr instane, in a large prjet, suh as the nstrutin f multiple lks and dams, the ptimum management infrmatin system is typially mre mplex and rbust than that required fr a smaller, less mplex prjet. Larger prjets have mre senir PMs assigned, and the smaller prjets are training grunds fr up-and-ming PMs. The larger prjets typially reeive mre attentin, funding, and ther resures than smaller prjets. Despite the imprtane f larger prjets, smaller prjets shuld nt be negleted. Smaller prjets may in fat be mre tehnially mplex and test the management skills f even the mst skilled and experiened prjet manager. The LRD must be gnizant f the pssibility f erasing the gains made n the larger prjets, in terms f perfrmane satisfatin, by the pssible lss f perfrmane n negleted smaller prjets. The rprate bards shuld takle this risk management issue. We therefre remmend that the LRD inrprate the very real dynami reated by large and small prjets int their PMBP. The best-in-lass private-setr firms rutinely use dual prjet management perating systems. CENTRALIZED MANAGEMENT We remmend that the PM be respnsible t the rprate bard fr management f all prjet-related ativities and funding, inluding the supervisin and administratin (S&A) and planning and design (P&D) funding. This allws mre effiient use f resures and perfrmane f the rle mandated by ER 5-1-11. Figure 3-5 shws the urrent relatinship between the PMs, usually assigned t ne prgram area (suh as ivil wrks r military prgrams), and the resident engineer (RE), usually dealing with multiple PMs and issues n the same installatin. This arrangement allws the nstrutin divisin t entrally manage the nstrutin S&A aunt and level resures arss the distrit. Althugh effiient frm a funtinal perspetive, it des nt always prvide the linkage between the distrit's strategi management and prjet pririties and, hehe, may result in subptimal prjet perfrmane. We remmend the PM be given full authrity t manage the PDT frm start t finish arss all phases f the prjet. We expet that the PM will rely a great deal n the RE, with the RE beming the de fat field manager during nstrutin. 3-17

The LRD needs t establish lear rles and respnsibilities fr bth the PM and RE. We envisin that the PM will handle the st ntrl, lient relatins, prjet risk, and ntrat management issues, and the RE will handle the shedule, field supervisin, and quality assurane aspets f the jb. Figure 3-5. Current Organizatinal Respnsibilities f the PDTs ^ PM Oversight ^ S&A Management CW Prjets MILN Prjets HTRW Prjets OMA Prjets Nte: AE = area engineer; CD = nstrutin divisin; CW = ivil wrks; DPM = deputy fr prjet management; MILN = military nstrutin; and OMA = Operatins and Maintenane, Army. Risk Management Prgram We remmend that the LRD and distrits implement a risk management prgram t deal with multiple prjet risks and t help identify, assess, and manage risk n prjets and within the prjet prtfli. This setin deals with risk at the prjet level; Chapter 4 deals with risk inherent in the distrit's prjet prtfli. Risk management is regnized thrughut industry as a key element f the suessful management f prjets. As the management f risk evlves thrugh the life yle f a prjet, knwing hw t manage risk enhanes the prbability f suess. Risk management deals with the unknwn utme f, and respnse t, future events. In general, utmes are ategrized as favrable r unfavrable, and risk management is the siene f planning, assessing, and handling future events t ensure favrable utmes. The alternative t risk management is risis management, a resure-intensive press nrmally nstrained by a restrited set f available ptins. 13 Adapted frm the Defense Systems Management Cllege, Risk Management Guide fr DD Aquisitin, send editin, May 1999. 3-18

Linking Strategy t Exeutin The different risk ategries in the risk management prgram shuld inlude the fllwing: Tehnial, quality, and perfrmane risks. These inlude unprven r mplex tehnlgy, unrealisti perfrmane gals, and hanges in tehnlgy r industry standards. Prjet management risks. These inlude pr allatin f time and resures, prblems with ntratrs, size f prjet, and pr mmuniatin tehniques. Organizatinal risks. These inlude internally innsistent st, time, and spe bjetives, lak f priritizatin f prjets, inadequay r interruptin f funding, rganizatinal experiene with this type f prjet, and resure nflits. External risks. These inlude hanges in the regulatry r legal envirnment, hanges in the market r enmy, labr issues, spnsr r wner issues, and physial prjet attributes (weather, latin, et.). In develping an effetive risk management prgram, the LRD and distrits shuld ensure the prgram inludes an effetive analysis f risk based n the severity f its impat n the prjet r prtfli, an effetive risk-ntrl strategy, a press fr ntinually reevaluating and reassessing risk during prjet implementatin, an effetive risk-mnitring plan, and a useful "lessns-learned" dument based n the risk management strategies. In many best-in-lass rganizatins, the prjet management rganizatin identifies an individual (r grup f individuals, depending n the size f the peratin) t at as a risk manager, r steward f risk management praties. As an advate fr managing risk in the rganizatin, the risk steward keeps risk management fremst in everyne's mind: risk awareness is send nature in the business peratins. 3-19

Cllabrative Prjet Prtals Standardized business praties and effetive mmuniatin and llabratin within a PDT are key elements in suessfully mpleting a prjet. Frm develpment f the prjet requirements and neptual design t the atual nstrutin and maintenane f a faility r struture, there is a nstant exhange f infrmatin amng prjet team members. The Crps' urrent initiative t develp the P2 system will prvide a standardized prjet management infrmatin system designed t enhane upward reprting and prgram management. We antiipate it will have sme prjet-level attributes, suh as st and shedule data, but will nt enhane mmuniatin, infrmatin flw, and llabratin amng the PDT members. One step in standardizing the PMBP is standardizing and autmating the prjet management plan. Althugh ER 5-1-11 requires management plans fr all prjets, prjet management plans are nt always prepared r, when they are, nt used in the management f a prjet and just put away. Develpment f an autmated prjet management plan press that prvides the ptimum level f business standardizatin and the best set f tls t help the PM and team is needed. We remmend the LRD and distrits investigate the use f llabrative prjet sites t enhane mmuniatins and infrmatin exhange. Use f an autmated prjet site (web prtal r divisin/distrit intranet site) within the LRD distrits allws fr standardizatin f PMBP praties, frm management plan develpment and team building t prjet perfrmane measurement. Rapid advanes in infrmatin tehnlgy nw allw the PDT t send and reeive infrmatin using, fr example, the Internet and a simple web brwser. This permits a signifiant hange in the way the LRD rganizes fr prjet management and wrk grup llabratin. Using an eletrni prjet site, PMs an seure and entralize prjet data, using a standardized frmat, fr all that need t see it, thereby reduing sts and saving time as they gather and disseminate infrmatin thrughut the prjet life yle. Using a entral prjet site n the web, prjet teams an develp their management plans (using a standard template), maintain a nstant windw int a prjet's evlutin, and mmuniate, rdinate, and llabrate effetively with all team members, wherever they happen t be. A stati eletrni repsitry f prjet infrmatin, e.g., duments and drawings in a virtual file abinet, meets nly abut 40 perent f the funtinality f a llabratin system. The true pwer f a llabrative system is the ability t simultaneusly revise duments r mark up drawings, rapidly exhange infrmatin, mmuniate in interative disussins, mve duments thrugh the prjet press using wrkflw tls by streamlining review yles, and ntinuusly and systematially update prjet status. 3-20

Linking Strategy t Exeutin Team members an pst, share, retrieve, mdify, and trak the prjet infrmatin they need, inluding the latest mputer-aided design files, spreadsheets, requests fr infrmatin, submittals, transmittals, live database reprts, phts, and ther third-party sftware appliatins. Infrmatin is always available t the right team member at the right time and plae, regardless f latin. Fr rganizatins seeking ISO 9000 mpliane, a llabrative prjet site with dument management apabilities allws it t maintain and ntrl ritial duments. Rles and Respnsibilities We remmend that the LRD and distrits establish lear rles and respnsibilities fr the rganizatin, PM r team leader, and the PDT members. Table 3-2 shws a sample array f respnsibilities. In this matrix, we identify different funtinal r management areas fr the different players in the prjet delivery press and link the ntinuus elements f the PMBP t several f the key prjet management ativities. The matrix assigns respnsibility t several levels f the rganizatin (team leader/pm, prjet team, distrit, and LRD/HQ) representing the tatial and strategi perspetives. Cmpeteny in Prjet Management Althugh the LRD and distrits have sme frmal training and sme ad h mehanisms in plae t build prjet management mpetenies, a mre fused, entralized effrt is needed t identify and prepare the right peple with the right skills t perfrm at the right time. Seleting PMs and training them t beme mpetent in managing prjets is a signifiant respnsibility. The quality f a prjet is signifiantly redued when mpetenies are weak. The mpeteny f the PM defined by effetiveness in funtining in the rles f visinary, tehnial expert, mtivatr, team builder, and negtiatr is a key t suessful prjet r prdut mpletin. The ability, r inability, f PMs t use "tempral skills (a basi rientatin tward past, present, and future) that mplement the nging ativities that their prjets are experiening" are reasns fr prjet management suess r failure. 14 Jeffery K. Pint and Dennis P. Slevin, "The Causes f Prjet Failure," IEEE Transatins n Engineering Management, Vl. 37, N. 4, Nvember 1990, pp. 269-276. 3-21

Table 3-2. Prjet Management Rles and Respnsibilities Planninq (What are we aimina fr and why?} Develp prjet bjetives, gals, and strategies. Desriptin PM PDT Distrit LRD/HQ Develp prjet wrk breakdwn strutures. X X Develp preedene diagrams t establish the lgial relatinship f prjet ativities and milestnes. Develp time-based shedule fr the prjet. X X Plan fr the resure supprt f the prjet. X X Orqanizinq (What's invlved and whv?) Establish rganizatinal design fr team. X X Identify and assign prjet rles t members f the prjet team. Define prjet management pliies, predures, and tehniques. X X X X Establish standards fr the authrity, respnsibility, and auntability f the prjet team. Mtivatin (What mtivates peple t d their best wrk?) Determine prjet team member needs. X X Assess fatrs that mtivate peple t d their best wrk. X X X X X X X X X Prvide apprpriate unseling. X X Establish rewards prgram fr prjet team members. X X Cndut initial study f impat f mtivatin n prdutivity. Leadership (Wh deides what and when?} Establish limits f authrity fr deisin-making fr the allatin f prjet resures. Develp leadership style. Enhane interpersnal skills. X X Prepare plan fr inreasing partiipative management. X X Develp nsensus deisin-making tehniques fr the prjet team. X X Cntrl (Wh judaes results and by what standards?) Establish st, shedule, and tehnial perfrmane standards fr the prjet. X X X X X X Prepare plans fr the means t evaluate prjet prgress. X X X Establish a prjet management infrmatin system fr the prjet. X X X (X) Prepare prjet review strategy. X X X Trainina (Hw is mpeteny maintained?) Establish prjet management and team training standards. X X Establish a mprehensive PM and team member level training prgram. X X Implement a mentring prgram. X X Develp and implement a team perfrmane evaluatin system. X X X 3-22

Linking Strategy t Exeutin The LRD and distrits shuld review their prjet management mpetene at the individual, team, and rganizatinal levels t answer the fllwing questins: Hw apable are individuals at identifying and implementing slutins t prblems? This typially inludes the PM, the prjet spnsr, tehnial persnnel (team members), funtinal managers, and supprt persnnel. Hw effetive are teams at harnessing the rss-funtinal perspetives needed t reslve mplex prblems typially enuntered in distrit prjets? D they identify prjet gals and bjetives, wrk tgether effetively, and ntinuusly imprve their perfrmane? Hw apable is the rganizatin at reating an envirnment that enables individuals and teams t arry ut their jbs effetively? This typially inludes review f the llabrative envirnment, rganizatinal pliies and standards, and resures mmitted t enhane team-building. Fstering exellent managers wh have nt just multiple funtinal skills, but sensitivity and pereptiveness regarding the sfter, mre judgmental issues that are ften ruial t prjet suess is key. Prjet management mpetenies are typially divided int tw ategries: sft and hard skills. Sft skills invlve behavir, attitude, and mmuniatin styles. Hard skills refer t the mehanial skills f planning, sheduling, and ntrlling. Althugh hard skills are easier t perfet than sft skills, bth are neessary t suessful prjet management: hard skills set the gals and predures, while sft skills make sure that peple an meet thse bjetives: Sft skills inlude leadership, rganizing, flexibility, business judgment, trustwrthiness, integrity, mmuniatin styles, ahing and mentring, ative listening, setting and managing expetatins, nstrutive prjet negtiatins, and issue and nflit reslutin. Hard skills inlude the ability t define, plan, and ntrl the prjet in terms f strategi bjetives, deliverables, assumptins and nstraints, and resures n an iterative basis as the prjet mves thrugh its life yle. Effetiveness at senir levels f the prjet rganizatin requires peple f exeptinal breadth and ability. The prinipal harateristis f a PM are an ability t mprehend the tehnial, business, rganizatinal, and ther issues inherent in the jb; deisiveness; and gd interpersnal skills. Senir prjet and prgram managers exhibit a further ruial harateristi: an ability t take a wide and mprehensive view f the urrent and upming issues psed by the prjet, t integrate these int a fused, direted urse f atin, and t mmuniate these learly and diretly. 15 J. Davidsn Frame, Prjet Management Cmpetene: Building Key Skills fr Individuals, Teams, and Organizatins (San Franis, CA: Jssey-Bass Publishers), 1999. 3-23

Examples f enhaning prjet management mpetenies inlude leveraging PMI, training rganizatins, and eduatinal institutins t learn urrent prjet management tehniques and remain urrent with the state f industry pratie; supprting and funding prjet management prfessinal (PMP) ertifiatin and prjet management training prgrams; and initiating a mentring and prjet management develpment prgram t develp PMs. We remmend that the LRD assess the prjet management mpetene f its distrits (at the rganizatinal, prjet team, and individual levels) by investigating their urrent prjet management skill levels. We further remmend that the LRD develp a prjet management mpeteny prgram using industry prjet management mpeteny best praties. It shuld address, at a minimum, the prper eduatin and training levels and skills, suess and perfrmane measures, adequate tls t d the jb, and team-building. Prjet Supprt Offie We remmend that the LRD and the distrits nsider implementatin f a prjet supprt ffie (PSO). The PSO prvides a reliable team resure that underpins the suessful day-t-day peratin f the PM. Due t the multiple re issues f prjet management suh as business praties, mmuniatin, team mtivatin, analytial skills, and prblem slving PMs are hard-pressed t fus n the many prjet ntrl and administratin issues surrunding a prjet. The private-setr firms pratiing best-in-lass prjet management use this nept rutinely. The PSO "represents an evaluatin in the way multiple prjets are managed, frm neptin thrugh results measurement. The PSO is the rganizatinal struture, pliies, methdlgy, presses, predures, ntrls tls, peple, training, and all neessary mpnents required t integrate existing prjets, manage the prtfli, and ntrl the required funtins." 16 The PSO is typially staffed by a small team f experiened prjet prfessinals, eah with a well-grunded understanding f the mplexities and diffiulties f prjet management in the Crps. They prvide a sund fundatin n whih the PM an rely, thereby preventing prjet failure and ensuring the PM's suess. They may be the first t spt prjet trends leading twards failure, r they may identify nging prjets in need f supprt, smetimes remmending that prjets shuld be put n hld until ertain risk items are addressed. 16 Prjet Management Institute, "Prgram Management Offie Grup Mves Frward," PMI Tday, September 2000, p. 4. 3-24

Linking Strategy t Exeutin Table 3-3 identifies varius ativities that the PSO uld exeute fr the LRD and the distrits. Table 3-3. PSO Ativities Funtin Distrit Divisin/RBC HQ Management f rprate prjet management standards Benhmarking Perfrmane measurement Analysis f prjet prtfli priritizatin Risk management (rprate and prjet level fus) Sftware standardizatin (estimating, sheduling, presentatin, et.) X X (X) Operatinal (htline) supprt X Management f training requirements X X Skills develpment (PM, team members, rganizatinal) Team-building and partnering X X Career develpment X X X Interatin with prjet management prfessin X X X X X X X X X X X X X X X Y Benhmarking We remmend that the LRD and distrits ntinue t benhmark themselves against the best-in-lass praties in the industry and adpt effetive business praties. The Berkeley assessment researh indiates that by inreasing the LRD verall results by 0.50, an 11 perent shedule imprvement and a 12 perent st imprvement an be realized. We als remmend the LRD identify the amunt f time and effrt it spends n prjet management servies and mpare this t the industry average. Frm the results f the Berkeley assessment tl researh, prjet management expenditures measured as a perentage f prjet management revenues averages 2.2 perent. In additin, thse firms with higher prjet management maturity have lwer prjet management st. 3-25

Chapter 4 Prjet Prtfli Management INTRODUCTION T ften, prjet team members are assigned t prjets haphazardly and dn't understand the needs f the team and their expeted rle. In sme ases, the funtinal managers, typially thse respnsible fr assigning team members, d nt have an effetive prgram in plae t manage assignments f their persnnel t the many teams they are required t supprt. Time and attentin are wasted reslving nflits ver resures, resulting in missed milestnes, nfusin within the funtinal divisins, and a general dissatisfatin with the PDTs. In this hapter, we lk at ways a distrit an handle multiple prjets simultaneusly. Chapter 3 dealt with the issues regarding management f a single prjet, stensibly with a prjet team led by a prjet manager with prper authrity and respnsibility. But as we add mre mplexity in the frm f many prjets underway at the same time in different phases f their life yle with team members wrking n many different prjets, the mpetitin amng prjet leaders fr the mmn resures f the funtinal manager grws dramatially. Several issues are at wrk in this type f envirnment. First, althugh the prjets share mmn resures, they will nt neessarily share bjetives, espeially if a diverse set f ustmers is invlved. Als, as the prjets me and g, the mix f required resures will hange, with sme prjets having higher pririties than thers. Having many prjets underway simultaneusly seriusly exaerbates resure mpetitin, resulting in inreased nflit amng persnnel and gamesmanship t urry favr in rder t mpete fr the sare resures. Many times, senir management must intervene t deided hw prjet pririties are set ften pening the dr fr ffie plitis. The prjet review bard (PRB) at the distrit level, designed t review and disuss ptential slutins t prjet issues, is effetive, but des nt fully address all prjet issues. N entral deisin supprt mehanism is in plae t evaluate the varius mpeting issues f, fr example, st, shedule, and distrit resures. In the private setr, firms are nstantly nsidering new initiatives and reviewing nging prjets. Despite the imprtane f prjet prtfli management, it is generally diffiult t d effiiently and rretly. One f the mre diffiult prblems large firms and rganizatins fae is deiding hw t ptimize the allatin f their resures. Deisins are made when new initiatives are nsidered and, at least in thery, during frequent prjet reviews. The typial press these firms fllw is t evaluate the prjets, assess the 4-1

mpany's strategy and resures, and allate these finite resures t the prjets t maximize suess, minimize risk r harm, and math the mpany's strategi gals. Best-in-lass firms typially use a mixture f qualitative and quantitative prjet assessment tehniques, and graphi depitins f prjet and prtfli harateristis, t build a visual representatin f a "balaned" prtfli, r rugh uses f ptimizatin methds and ranking tls. Other, less mature firms typially nly have a rugh plan fr managing prjets, pr merging f PM assessments with exeutive-level deisins, and a weak appreiatin fr the limitatins f the sftware and assessment tls they use. PORTFOLIO MANAGEMENT The distrit's prjet prtfli is a grup f prjets that mpetes fr sare resures with multiple and nfliting bjetives. As disussed in Chapter 3, the distrit's prtfli seletin and prjet priritizatin must be linked t the Crps' rprate strategy. Sine prjets reate value fr the ustmer, failure in the management f multiple prjets will impair the ability f the distrit t amplish its missin and redue perfrmane. The strategi-level planning and ntrl peratin is managed at the rganizatin's rprate level and deals primarily with prjet priritizatin and resure allatin (See Figure 3-3). As deisins are made at this level, they asade dwn t the individual prjets fr exeutin. The strategi level is a rll-up f the individual prjet requirements. Prjet Prtfli Management Prgram An rganizatin using prtfli management effetively is typially ne fused n wrk that diretly supprts the ahievement f its strategi gals, bjetives, and missin. A prjet prtfli management prgram usually inludes the apprpriate mix f prjet ategries, the riteria used t sre prjet andidates, and the rganizatin's apaity t exeute prjets. The gal f prtfli management in the distrit is t allate the right resures effetively, effiiently, and nsistently t missin-ritial prjets. Effetive prjet prtfli management invlves understanding the relative value and risk assiated with nging and prpsed prjets, the way resures are allated arss prjets and the amunt available fr new prjets, and the need t make tugh deisins abut hw, when, and whih prjets will be mpleted, if at all, based n a shared understanding f the value they add t the rganizatin. 4-2

Prjet Prtfli Management The issue f the strategi fit f a prjet is a signifiant hallenge. Strategi prtfli seletin tehniques typially invlve higher level management, whih is able t deide n strategi diretin, fus, and budget allatins. Prtfli analysis, using partiipative deisin-making nerning the fit, is highly desirable. It is repeated at regular intervals t ensure the adpted strategy is updated t suit the urrent peratinal envirnment. The seletin riteria an be bth qualitative and quantitative, with nsideratin f plitial bjetives. Priritizing Prjets in Prtfli The LRD needs t enhane the integratin between strategi management and tatial exeutin, i.e., its use f resures t mplete multiple, simultaneus prjets shuld be imprved. Many distrits have diffiulty with their priritizatin f prjets and with the allatin f their limited resures, bth fr in-huse exeutin and ntrat administratin requirements. N frmal methd exists fr linking strategi aim with resure allatin, i.e., the prjets that wuld supprt and enhane strategi gals did nt always reeive the attentin and nentratin f resures they deserved. Fr example, in terms f staffing either an in-huse design r managing an A-E's wrk, priritizatin typially invlves the funtinal hief making an eduated guess at the distrit's highest pririties and the prjet manager trying t nvine the funtinal hief f the ritial nature f a ertain prjet. Withut sme basis fr disretin amng prjets, all beme a number ne pririty. This results in subptimal deisins, ften reduing the distrit's perfrmane. A gd example f this urs when prgram funding redutins are passed dwn frm higher headquarters and deisins must be made as t hw t distribute the funding uts. Withut an effetive deisin supprt mehanism fr hsing the "right" prjets, the distrits are mre likely t ut funding fr the "wrng" nes. In additin, finding the "best fit" (mathing persnnel ideally suited t speifi prjets) n the basis f skill, experiene, and prjet need rather than n rganizatinal plitial bias r favritism is mre diffiult. When it mes t priritizing in a prtfli, prjets are f a number f types: Sared ws (prjets suggested, r mandated, by management) Operating neessity (prjets supprting existing systems) Cmpetitive neessity (prjets that enable distrits t keep abreast f the mpetitin). 4-3

PRIORITIZING PROJECTS Many prjets are delayed and fail t meet st and shedule expetatins beause the resures that were prmised at the nset were never atually allated r were stripped away. The ver-mmitment f resures is a mmn prblem, ften stemming frm the philsphy f ding "mre with less." We remmend that the LRD distrits priritize prjets by develping a prjet seletin methdlgy t assist in their resure allatin deisin press. Setting verly ambitius gals in resure allatin is unrealisti and is a reipe fr prjet failure. Realisti bjetives permit the prper allatin f resures and prvide reasnable hanes fr suess. It is nt in management's best interest t make every prjet a tp pririty. Experiened team members an easily regnize when they've been shrt-hanged n resures and that even a superhuman effrt n their part will have minimal hane f ahieving suess. The alignment f resures with prjet requirements shuld be a prenditin f the prjet plan and a primary gal f prtfli nfiguratin. Resures shuld nt be treated like a shell-game, bth internally within the rganizatin and externally with the lient. Careful resure allatin means meeting the expetatins f the ustmer and demnstrating management's mmitment t the lient and t its emplyees. T ensure suitable resures are available, a mehanism that mathes resures with prjet requirements shuld be used when seleting prjets in the prtfli. Having adequate resures t mplete the prjet within the budgeted st and shedule is a ritial variable f prjet suess and needs t be ne f the filters in measuring risk and ranking the prjets within the prtfli. T ensure the resure shell-game is nt played, prjets shuld have levels f pririty t establish their rank in reeiving resures. A simple methd f dividing prjets int a range f imprtane wuld be t assign them numerial values: Pririty ne, fr the mst ritial. Only a few prjets wuld reeive the highest rank sine ample resures wuld be dediated t ensure suess. Pririty tw, fr prjets deemed imprtant, but less ritial n the basis f their psitin n the ranking hart. Pririty three, fr prjets that are imprtant but less essential in terms f ustmer need r rganizatinal missin. Resures fr these prjets uld be made available in emergenies t supprt pririty ne prjets. 4-4

Prjet Prtfli Management Prjet Pririty Matrix Figure 4-1 shws a simple methdlgy fr systematially assessing the relative psitins f the prjets within the prtfli. Fr eah prjet, the distrit wuld develp a weighted sring mdel and define the measures f interest and establish riteria weights using the distrit rprate bards, rank rder the results, and selet the prjet prtfli mix within available funding. Figure 4-1. Sample Prjet Ranking Chart Sre Criterin Criteria weight Redues perating sts 20 Imprves safety 20 Has aeptable risk 20 Fits with budget exeutin plan 10 Prvides imprved servie t ustmers 10 Ttal Sre Very gd (3) Fair (2) Pr (1) Weighted sre A prjet sreening bard (whih uld be a "wrking-level" PRB r the risk management steward) uld perfrm this exerise t me up with a slate f prjets fr nsideratin. The distrit's rprate bard uld then apprve r amend the ranking f the prjets. 1 One the prjets are listed in pririty rder, the simple 1 thrugh 3 ranking disussed abve uld be applied t grup the prjets. Understanding Prjet Risk Perfrming the prjet sreening exerise helps build an understanding thrughut the distrit f hw prjet risk influenes prjet seletin. Identifying and measuring risk an help a distrit determine relative plaement f a prjet in a distrit's prjet prtfli and the apprpriate allatin f resures t eah prjet. By priritizing prjets, the rprate bard and PDT an fus n ritial areas and issues. It als prvides perspetive n the imprtane a ustmer plaes n ertain aspets f prjet perfrmane and an help the PDT fus n ritial issues. 1 Additinal riteria uld inlude whether the prjet missin is ritial fr ustmer and whether adequate resures are available. 4-5

Chapter 5 Perfrmane Management INTRODUCTION A perfrmane management system will strngly affet the behavir f the managers and emplyees in the distrits. A rprate fus n finanial-nly perfrmane measures will skew the pereptin f perfrmane suess. Fr example, the Crps' use f budget exeutin data as the primary element in determining prjet and prgram suess prvides nly part f the perfrmane piture. The LRD must lk at a balaned blend f finanial and nnfinanial perfrmane measures in determining suess. Publi- and private-setr best-in-lass rganizatins use perfrmane measurement t gain insight int, and make judgments abut, the effetiveness and effiieny f their prgrams, presses, and peple. These rganizatins deide whih indiatrs will best measure their prgress in meeting strategi gals and bjetives, gather and analyze perfrmane data, and then use these data t drive imprvements in their rganizatin and suessfully translate strategy int atin. These best-in-lass rganizatins have in plae a mature perfrmane measurement press, mmuniate this press thrughut the rganizatin, learly link strategi plans and auntability, use mpensatin and rewards systems effetively, perate effetive infrmatin management systems, and use perfrmane measurement results t drive ntinuus imprvement. T apitalize n this, Cngress enated the GPRA, Chief Finanial Offiers At, and Gvernment Management Refrm At f 1994 requiring federal agenies t develp strategies t deliver high-quality gds and servies t their ustmers, and measure their prgrams' perfrmane in meeting these mmitments. This hapter addresses the develpment f a perfrmane management prgram designed t effetively measure and evaluate the prjet management delivery strategies disussed in Chapters 3 and 4. 1 Natinal Perfrmane Review, "Benhmarking Study Reprt," Washingtn, DC, June 1997. 5-1

PERFORMANCE MANAGEMENT In the ntext f this study, perfrmane management is the press whereby the LRD r a distrit rganizatin ensures that it is pursuing strategies and atins that will enable it t ahieve its gals and bjetives. The measurement and evaluatin f perfrmane are entral t ntrl and require that fur basi questins be addressed: 2 What has happened? Why has it happened? Will it ntinue? What are the nsequenes, and is any respnse required? The perfrmane measurement aspet f the prgram is addressed in answering the "What" questin. The evaluatin aspets are addressed in answering the "Why," "Future," and "Cnsequenes" questins. By finding ut what has atually been happening, distrit senir management an determine with nsiderable ertainty in whih diretin the rganizatin is heading. If perfrmane is aeptable, they an ntinue n urse. If nt, the rprate bards an then apply anything frm a mid-urse rretin t a reversal in diretin, stensibly with enugh time t effetively make the hange. Seletin f a range f perfrmane measures apprpriate t a distrit shuld be made in relatin t their strategi intentins. Sine the Crps is aspiring t be the "wrld's premier engineering rganizatin," then it shuld be measuring its perfrmane in this area relative t its mpetitrs. The prjet management press benhmarking assessment nduted as a part f this study is a gd example f this mparisn. In additin, sine the Crps endeavrs t imprve prjet exeutin and ustmer satisfatin (bth a funtin f servie quality), then it shuld be mnitring and ntrlling the desired level f quality. The fllwing subsetins utline the varius elements f a perfrmane management prgram. Best-in-Class Systems An effetive perfrmane management prgram prvides an rganizatin the ability t take a mprehensive lk at where they are and where they are ging, and then reat apprpriately. ' This is the same ntrl feedbak lp philsphy disussed in Chapter 3. 5-2

Perfrmane Management Types f Measures Best-in-lass systems typially have these harateristis: Measures shuld prvide fr a limited, strategi fus. The distrits shuld selet a few ritial measures fr determining prjet management and prjet delivery perfrmane. Measuring everything, r at least t many items, dilutes and bsures the really imprtant issues. The perfrmane measures shuld be linked t strategi gals and bjetives and peratinal planning. Measures shuld be f the prper elements f the PMBP. The distrits shuld develp entral measures f the PMBP, tied t the strategi fus. Targets, ranges, r speifi values may be used. Measurement press shuld nt be the fus. The distrits need t fus n the strategi and peratinal gals and the perfrmane measurement results, i.e., the evaluatin f the perfrmane measures, and nt fus n the measurement itself. Wrld-lass rganizatins tend t be interested in the same general aspets f perfrmane: internal business peratins, finanial nsideratins, and satisfatin f the ustmer, emplyee, and stakehlder. Fr the Crps, and the LRD in partiular, these map t the PMBP, prgramming and budget issues, and the internal and external satisfatin issues. When hsing an apprpriate range f perfrmane measures, it is neessary t balane them t make sure that ne dimensin r set f dimensins f perfrmane is nt stressed t the detriment f thers e.g., the finanial (budget exeutin) issue disussed abve. The mix hsen will vary frm firm t firm in the private setr and frm distrit t distrit fr the LRD. Establishing the Prgram One an rganizatin has deided n its perfrmane measures, the next step is t determine a baseline fr eah f the measures seleted. This is dne ne data are lleted fr the first time n a partiular measurement. Determining apprpriate gals fr eah measure after these baseline data are lleted an be amplished in several ways, e.g., varius statistial analysis tehniques as well as benhmarking t set gals fr future perfrmane. One tehnique is t set gals that will fre the rganizatin t "streth" t exeed its past perfrmane. By benhmarking measures, an rganizatin an validate the fat that the gals are still attainable. Organizatins shuld ntinually assess whether their urrent measures are suffiient r exessive, prve useful in managing the business, and drive the 5-3

rganizatin t the right result. Perfrmane measurement has n purpse if data are nt used t imprve rganizatinal perfrmane. When measures beme bslete, they shuld be eliminated r replaed. Perfrmane analysis als lets rganizatins hange the pririty f speifi measures ver time. Refining and hanging measures is healthy and neessary, but frequent hanges will ause nfusin and may affet auntability. Respnsibility and Auntability The distrit's senir leadership auntable fr develping the strategi plan and resure allatin plans shuld be the key individuals respnsible fr establishing perfrmane measurements and gals; they at as enablers fr effetive perfrmane measurement systems. Generally, managers, individual business units, r the in-huse staff are auntable fr rdinating and maintaining the perfrmane measurement system. The perfrmane gals f an rganizatin are a shared respnsibility f all its emplyees, eah f whm has a stake in the rganizatin's suess. A ritial hallenge fr private and publi rganizatins alike is ensuring that this shared respnsibility des nt g unfulfilled. Auntability helps rganizatins meet this hallenge. 3 Underlying emplyee empwerment is management's view f its emplyees as an asset rather than a resure. The press f perfrmane measurement has led t a better understanding f hw individual emplyees r teams f emplyees ntribute t the perfrmane gals f an rganizatin. The ntributins f individuals and teams are a starting pint fr enumerating the results fr whih they are auntable. One established, eah individual is held auntable fr the apprpriate perfrmane measure. Generally, rganizatins have a frmal written plan desribing hw perfrmane measures will be implemented. In many ases, the plan details the measurements, gals, bjetives, and mmn alignment t the rganizatinal strategy. In additin, it is a mmn pratie t identify ne individual wh will be respnsible and auntable as a respetive measurement wner. Finanial and Nnfinanial Indiatrs There is a tendeny in gvernment rganizatins t manage t the budget, r the "bttm line." As in the private setr, a fus n the bttm-line finanial indiatrs remains the fundamental management tl. This finanial-nly perspetive enurages management t take a number f atins that fus n the shrt term at the expense f investing fr the lng term. Arding t the NPR's benhmarking study, "the system is a lsed lp... respnsibility is attahed t authrity resulting in auntability...yu an nly hld emplyees auntable if they have ntrl." 5-4

Perfrmane Management Rbert S. Kaplan f the Harvard Business Shl states: "if senir managers plae t muh emphasis n managing by the finanial numbers, the rganizatin's lng term viability bemes threatened. That is, t prvide rprate deisin makers with slely finanial indiatrs is t give them an inmplete set f management tls." The finanial view is a ne-dimensinal lk at rprate ativity. Inreasingly, ver the past deade, industry has emphasized the imprtane f the nnfmanial type f perfrmane measurement. The single bttm-line number is well-understd by exeutive management; it tends t avid using multiple indiatrs beause they are diffiult t design and smetimes diffiult t relate, ne t anther. Multiple indiatrs are made neessary by the sheer mplexity f the Crps and LRD rprate ativity. FINDINGS AND NCLUSIONS Althugh the distrits are fusing n their ustmers and have started linking strategi perfrmane with prjet perfrmane, n nsistent metris are in plae t measure effetiveness in satisfying the ustmer. The urrent fus n bligatins/expenditures and upward reprting requirements detrats frm lal PM requirements and desn't prvide an adequate measure f perfrmane. Several distrits have taken signifiant steps t adpt a perfrmane measurement prgram, using bth qualitative and quantitative perfrmane measures. Fr instane, Pittsburgh is develping its balaned sreard, Luisville ntinues with its ISO ertifiatins (Huntingtn and Pittsburgh are sn t fllw), and Huntingtn, Nashville, and Pittsburgh use either the APIC r the state-spnsred Baldrige mpetitins t measure perfrmane. REMMENDATIONS We remmend that the LRD and distrits implement perfrmane measurement and perfrmane management at bth the prjet and team levels and use measures that fus n ustmers (linking strategi and prjet perfrmane). These measures must differentiate between types f ustmers and their mmn and unique needs. Perfrmane-based management enurages managers t agree n bth the ageny prgram gals and the implementatin strategies required t ahieve them. These managers will then be able t "develp perfrmane measurement systems t manage prgrams in auntability t stakehlders and publi, demnstrate effetive r imprved perfrmane, and supprt resure allatin and ther pliy deisin making." 5-5

Regular mnitring f the servie r prdut quality and prgram results is a ritial fatr in effetive prgram perfrmane management. Perfrmane r utme mnitring is ritial t enhaning the suess f any enterprise. Key perfrmane indiatrs an be reviewed peridially thrughut the life yle f a prjet: (1) the nsistent use f prjet management systems, (2) the establishment f ntrl presses, (3) the use f interim metris, (4) the quality f resures used versus resures planned, and (5) the invlvement f the ustmer. Table 5-1 presents sample perfrmane measurements and utlines several types f perfrmane measures, bth finanial and nnfinanial, that meet the gals and bjetives f ER 5-1-11. The perfrmane measures identified shuld be develped in njuntin with ther distrit strategi measures, similar t the Huntingtn and Pittsburgh effrts. Table 5-1. Sample Perfrmane Measurements fr LRD Distrits Gals Objetives Initiatives Measures Inrease ustmer satisfatin Imprve exeutin f prjets and prgrams Delighted Custmer Enhane reputatin as wrld's premiere engineering rganizatin Exeed expetatins Imprve business presses Dument ustmer requirements and expetatins in management plan Develp new business pprtunities Set realisti expetatins with ustmer, distrit, PDT Manage perfrmane (at distrit and prjet level) Representative measures Crret press prblems Map prjet management business presses Optimize rprate and ustmer resures Fster teamwrk Prvide fal pint fr interfae with ustmer Emphasize mpleting prjets; nt just phases Imprve mmuniatin Feedbak Frmal surveys (partnering sessins and end f prjet) Infrmal disussins Number f ustmer referrals Repeat business Number f new ustmers Credentials: Level f expertise: number f PMP, PE/RA, et. Level f higher eduatin: graduate Number f regnized experts in distrit Number f years f servie, by disipline Number and value f prjets early and/r under budget Number and value f prjets late and/r ver budget Satisfatin index f PDT frm final team survey Earned value analysis Perentage atual expenditures t planned Perentage f milestnes met, by prgram Trend f aquisitin lead time (by prjet phase) Reliability: Up-time f peratinal failities Respnse time t M&R servie alls Number f rewrk items (due t ntratr); mdifiatins (due t designer) Results f ustmer and team perfrmane surveys Number f press prblems identified in reprting perid Number f press hanges made in reprting perid Implement standardized PMBP linking strategy and exeutin Results f peridi benhmark f PPM presses Clear priritizatin f distrit prtfli Perentage f tp pririty prjets nt mpleted/started as sheduled r prgrammed Perentage f unprgrammed/unantiipated wrk mpleted (funding turbulene) Results f PDT surveys and partnering sessins Number f team awards in reprting perid Rati f ustmer-speifi PMs (r aunt exeutives) t number f ustmers in distrit Analysis f prjet milestne delivery time Results f PDT surveys and partnering sessins 5-6

Perfrmane Management We further remmend that the distrits investigate the use f the Baldrige r APIC riteria and presses. The rigr and disipline needed t mpete fr these prestigius awards ffers a superb pprtunity t integrate many different imprvement effrts, inluding the nging PMBP initiatives. In general, these prgrams review leadership, infrmatin and analysis apabilities, strategi planning, human resures utilizatin, quality assurane, and ustmer satisfatin. 5-7

Chapter 6 Preliminary Implementatin Plan The LRD an take a number f steps t imprve the effiieny and effetiveness f its prjet management presses. In general, we advate pilt testing the remmendatins at ne r tw LRD distrits t refine implementatin and develp buy-in frm the wrk fre. Adptin f these remmendatins will redue prgram and prjet risk and help the LRD and distrits t imprve their perfrmane level. Furthermre, it will generate repeatability in their presses. PROJECT MANAGEMENT BUSINESS PROCESSES We remmend the fllwing in regard t prjet management business presses: Clarify and prmulgate the linkage between the strategy and prjet exeutin by develping lear pliies, standards, and guidane. Define and standardize the ativities f the PMBP. It shuld inrprate > prjet suess fatrs and key perfrmane influene fatrs; > business press flws fr bth the multiprjet and single-prjet envirnment and large and small prjets; > prjet and rganizatinal perfrmane measures; > rles and respnsibilities f the rganizatin, PM, and the PDT; and > requirements fr the use f lessns-learned in prjet planning. Develp a risk management prgram fr the distrits. Prjets shuld inlude the develpment, dumentatin, and distributin f a mprehensive risk management plan. Risk management, if effetively emplyed, shuld be send-nature t thse n prjet and prgram teams. Enhane mmuniatins within the distrits and PDTs by > investigating the use f eletrni prjet prtals t imprve the llabratin f team members, the mvement f prjet infrmatin, and the standardizatin f prjet plans; 6-1

> prmulgating the results f the PRBs t the PDTs t mmuniate deisins made and ensuring distrit persnnel are aware f the results f distrit's prtfli ranking; > inreasing mmuniatin and sharing f ideas, prblems, and best praties amng distrit engineers (meeting at least a quarterly); and > ensuring that fr sme minimum prjet size, regular team meetings are sheduled t trak prjet perfrmane and identify and reslve prjet issues (bth internal and external t the PDT). Pursue integratin f P2 int the distrit peratins. Depending n the results f implementing P2, als nsider the use f a simple prjet sheduling sftware prgram fr prjets that dn't need the mplex netwrk analysis system as prvided by Primavera. One size des nt fit all. Organize arund the ustmer, e.g., by latin, prgram, r ngressinal distrit. Inrease fus n ustmer satisfatin by lleting ustmer feedbak thrughut the entire prjet delivery press, nt just the nstrutin phase. Assess the needs and expetatins f bth the ustmer (internal and external t the distrit) and the team members. D this n a regular basis thrughut the urse f the prjet, bth frmally (thrugh surveys) and infrmally thrugh disussin. Establish an LRD prjet management mpeteny prgram t enhane prjet management mpeteny at the rganizatinal, prjet, and individual levels: > Establish lear rles and respnsibilities fr the LRD and distrits in exeuting prjet management. > Develp r enhane existing training and eduatin prgram fr prjet managers and team members. > Develp r adpt a prfessinal ertifiatin prgram fr prjet managers. > Inrease fus n team-building and establishing an effetive team wrking envirnment. Establish a prjet supprt ffie at the distrit level t assist the prjet manager and PDTs in managing their prjets. The LRD shuld als develp a divisin-level PSO t prvide and supprt standards, benhmarking, sftware standardizatin, skills develpment, and team-building. 6-2

Preliminary Implementatin Plan Cntinue t benhmark prjet management servies against best-in-lass firms and adpt best praties. Cnsider integratin f the PMBP int the prjet delivery yles using the ISO 9000 ertifiatin press t maintain a ntinuus imprvement fus. Cntinue mpeting fr the Baldrige-type annual awards t stay fused n servie delivery and ustmer satisfatin. PROJECT PORTFOLIO MANAGEMENT We remmend the fllwing in regard t prjet prtfli management: Develp a prjet prtfli management prgram at the distrit level t priritize the prjets within the distrit's area f respnsibility. Use this priritizatin t assist in allating resures t the prjet teams. Cnsider use f resure management sftware t assist in the effetive and effiient allatin f funtinal divisin resures. Inrprate prjet risk int the prtfli management prgram. PERFORMANCE MANAGEMENT In regard t perfrmane management, we remmend that the LRD develp and implement a distrit perfrmane management prgram t mnitr perfrmane f distrit prjets and the prtfli. 6-3

Appendix A Assessment Definitins PROJECT INTEGRATION MANAGEMENT The bjetive f prjet integratin management is t ensure that the varius elements f the prjet are prperly rdinated. It invlves making trade-ffs amng mpeting bjetives and alternatives in rder t meet r exeed stakehlder needs and expetatins. It inludes prjet plan develpment, prjet plan exeutin, and verall hange ntrl. PROJECT SPE MANAGEMENT The bjetive f prjet spe management is t ensure that the prjet inludes all the wrk required by the lient t mplete the prjet suessfully. It nsists f spe planning, spe definitin, spe verifiatin, and spe hange ntrl. PROJECT TIME MANAGEMENT The bjetive f prjet time management is t ensure effiient mpletin f the prjet. It inludes ativity definitin, ativity sequening, ativity duratin estimating, shedule develpment, and shedule ntrl. PROJECT ST MANAGEMENT The bjetive f prjet st management is t ensure that the prjet is mpleted within the apprved budget. It nsists f resure planning, st estimating, budgeting, and ntrl. The primary nern f st management is dealing with the st f resures needed t mplete prjet ativities. PROJECT QUALITY MANAGEMENT The bjetive f prjet quality management is t meet r exeed the needs f the lient. It inludes all ativities f the verall management funtin that determine the quality pliy, bjetives, and respnsibilities. It implements them by suh means as quality planning, quality ntrl and assurane, and imprvement within the quality system. A-l

PROJECT HUMAN RESOURCE MANAGEMENT The purpse f prjet human resure (HR) management is t make effetive use f the peple invlved with the prjet. It inludes all the prjet stakehlders (spnsrs, ustmers, individual ntributrs, prjet team members) training, and persnnel assignment. HR management nsists f rganizatinal planning, staff aquisitin, and team develpment. PROJECT MMUNICATIONS MANAGEMENT Prjet mmuniatins management attempts t ensure the puntual and apprpriate generatin, lletin, strage, and ultimate dispsitin f prjet infrmatin. It prvides the ritial link amng peple, ideas, and infrmatin that are neessary fr suess. It inludes mmuniatins planning, infrmatin distributin, perfrmane reprting, and administrative lsure. PROJECT RISK MANAGEMENT Prjet risk management is a press that seeks t maximize the results f psitive events and t minimize the nsequenes f adverse events. It shuld identify, analyze, and respnd t prjet risk. Risk identifiatin, quantifiatin, respnse develpment, and respnse ntrl are inluded in this knwledge area. PROJECT PROCUREMENT MANAGEMENT INITIATE PHASE Prjet prurement management is required t aquire gds and servies frm utside the perfrming rganizatin. It nsists f prurement planning, sliitatin planning, sliitatin, sure seletin, ntrat administratin, and ntrat lseut The gal f this phase is t develp a prpsal fr a ptential prjet effiiently and effetively. It analyzes the feasibility and staging f the prjet, and examines the pssibility f applying a systemati apprah fr prjet planning and managing. DEFINE AND ORGANIZE PHASE This phase defines the prjet's spe, rganizes the prjet team, and establishes a prjet-driven rganizatin envirnment. A-2

Assessment Definitins PLAN PHASE The planning phase defines a prjet and rganizes the prjet team learly. It establishes a framewrk within whih a team an wrk mst effiiently. TRACK AND MONITOR PHASE CLOSE PHASE This phase llets, analyzes, and reprts infrmatin fr prjet status. Any adaptive atins required as a result are planned and exeuted. This phase ensures that prjets are finished prmptly and that they are nt left pen fr an extended perid f time, pssibly resulting in delays and nfusin fr the rganizatin. PROJECT-DRIVEN ORGANIZATION ENVIRONMENT This area lks at the management "infrastruture" f an rganizatin t asertain the philsphies and presses in plae t sustain a prjet-riented rganizatin. Areas f interest inlude mpensatin f prjet managers and team, develpment f prjet relatinships with suppliers and subntratrs, planning fr areer advanement f prjet persnnel, budgeting fr prjet, and supprt fr prjet management presses in the rganizatin. A-3

Appendix B Maturity-Level Definitins LEVEL 1 AD HOC STAGE There are n frmal predures r plans t exeute a prjet. The prjet ativities are prly defined and st estimates are inferir. Prjet managementrelated data lletin and analysis are nt nduted in a systemati manner. Presses are unpreditable and prly ntrlled. There are n frmal steps r guidelines t ensure prjet management presses r guidelines. As a result, utilizatin f prjet management tls and tehniques is innsistent and applied irregularly, if at all, even thugh individual prjet managers may be very mpetent. LEVEL 2 PLANNED STAGE Infrmal and inmplete presses are used t manage a prjet. Sme f the prjet management prblems are identified, but these prblems are nt dumented r rreted. Prjet management-related data lletin and analysis are infrmally nduted, but nt dumented. Prjet management presses are partially regnized and ntrlled by prjet managers. Nevertheless, planning and management f prjets depend largely n individuals. An rganizatin at Level 2 is mre team-riented than at Level 1. The prjet team understands the prjet's basi mmitments. This rganizatin pssesses strength in ding similar and repeatable wrk; hwever, when the rganizatin is presented with new r unfamiliar prjets, it nfrnts majr has in managing and ntrlling the prjet. Level 2 prjet management presses are effiient fr individual prjet planning, but nt fr ntrlling the prjet r any prtfli f prjets. LEVEL 3 MANAGED STAGE At this stage, prjet management presses beme mre rbust and demnstrate bth systemati planning and ntrl harateristis. Mst f the prblems regarding prjet management are identified and infrmally dumented fr prjet ntrl purpses. Prjet management-related data are lleted arss the rganizatin fr prjet planning and ntrl. Varius types f analyzed trend data are shared by the prjet team t help it wrk tgether as an integrated unit thrughut the duratin f the prjet. This type f rganizatin wrks hard t integrate rss-funtinal teams t frm a prjet team. B-l

LEVEL 4 INTEGRATED STAGE The prjet management presses are frmal, with infrmatin and presses being well dumented in this stage. The Level 4 rganizatin an plan, manage, integrate, and ntrl multiple prjets effiiently. Prjet management presses are well defined, quantitatively measured, understd, and exeuted. Prjet management press data are standardized, lleted, and stred in a database t evaluate and analyze the press effetively. Als, lleted data are used t antiipate and prevent adverse prdutivity r quality impats. This allws an rganizatin t establish a fundatin fr fat-based deisin-making. In additin t effetively nduting multiple prjet planning and ntrl, the rganizatin exhibits a strng sense f teamwrk within eah prjet and arss prjets. PM training is fully planned and is prvided t the entire rganizatin, arding t the respetive rle f prjet team members, Integrated PM presses are fully implemented at this level. LEVEL 5 SUSTAINED STAGE Cmpanies at the sustained stage ntinuusly imprve their PM presses using, fr instane, frmal lessns-learned prgrams. Prblems assiated with applying PM are fully understd and addressed n an nging basis t ensure prjet suess. PM data are lleted autmatially t identify the weakest press elements. These data are then rigrusly analyzed and evaluated t selet and imprve the PM presses. Innvative ideas are als vigrusly pursued, tested, and rganized t imprve presses. Organizatins at Level 5 are invlved in the ntinuus imprvement f PM presses and praties. Eah prjet team member spends effrt t maintain and sustain the prjet-driven envirnment. Prjet teams are dynami, energeti, and fluid in a Level 5 prjet-entri rganizatin. B-2

Appendix C Sample Questins This appendix prvides sample questins frm the prjet management press maturity assessment tl. C-l

Sample Questins frm Prjet Management Press Maturity Assessment Tl The assessment tl integrates the fllwing PMBOK knwledge areas arss the phases f a typial prjet. Appint the Prjet Manager 25. Prjet Manager's Experiene N prjet manager identified 1 Prjet Manager is new t his/her mpany and is nt familiar with the type f prjet r ustmer 2 Prjet Manger is familiar with his/her mpany's predures but nt the type f prjet r ustmer 3 The Prjet Manager is familiar with mpany predures and type f prjet but nt ustmer 4 The Prjet Manager is familiar with the mpany predures, the type f prjet and the ustmer 5 Identify the Prjet Team 29. Cre team members identified frm eah grup invlved in the prjet N Cre Team identified 1 An infrmal, inmplete Cre Team is identifiable 2 An infrmal, but mplete Cre Team is identifiable 3 A frmal, mplete Cre Team is identifiable but withut a harter 4 A frmal, mplete Cre Team with a written harter is identifiable 5 Define the Prjet 34. Resure requirements and apabilities are reviewed N review f resures 1 Infrmal review f resures, n dumentatin 2 Infrmal review f resures, infrmal dumentatin 3 Frmal review f resures, infrmal dumentatin 4 Frmal review f resures, frmal dumentatin 5 37. Appliable prdut develpment r prjet lifeyle milestnes identified N prdut develpment lifeyle 1 Infrmal prdut develpment lifeyle but withut speifi milestnes 2 Infrmal develpment lifeyle with speifi milestnes 3 Frmal prdut lifeyle with speifi milestnes, but milestnes nt identified in the plan 4 Frmally dumented develpment lifeyle milestnes identified in the plan 5 C-3

Determine Wrklad Requirements 71. Distributin f all planned resures identified and dumented Prjet wrklad distributins nt used 1 Sme wrklad requirements determined as needed, but nt frmally dumented 2 Wrklad requirements fr sme key resures determined and dumented in the prjet file 3 Wrklad requirements fr mst resures, inluding all key resures, determined and dumented in the prjet file; sme requirements mmuniated t apprpriate grup managers 4 Wrklad requirements fr all resures determined and mmuniated t apprpriate grup managers fr planning 5 Cndut Trade-ff Analysis 78. Trade-ff press defined fr making final remmendatins Trade-ffs made withut frmal priritizatin and review 1 Sme analysis dne and remmendatins frmulated. Little r n dumentatin in the prjet file 2 Trade-ff remmendatins defined by prjet manager. Little r n dumentatin in the prjet file 3 Trade-ff remmendatins defined by prjet manager and seleted re team members. Remmendatins lsely dumented in prjet file 4 Trade-ff remmendatins fully defined by prjet manager and re team in nert with the prjet spnsr and dumented in the prjet file 5 Gain Agreement n Changes 82. An ptimized prjet plan agreed t by all team members (inluding the ustmer) and distributed Final (ptimized) plan nt reviewed with team members nr the ustmer 1 Final plan reviewed by re team, final apprval made by prjet manager. Plan nt distributed r distributin limited t re team members 2 Optimized plan reviewed and agreed t by re team nly. Plan nt distributed utside re team 3 Optimized plan reviewed and agreed t by re team nly. Plan distributed t all interested parties 4 Optimized plan reviewed and agreed t by all team members. Plan dumented in the prjet file and distributed t all interested parties 5 C-4

Islate Areas f High Sub-Prjet Risk 86. High risk areas identified and dumented Risk nt addressed, even infrmally by sub-prjet managers 1 Risk areas identified by sme prjet managers using infrmal presses 2 Risk areas identified by sme, inluding mst key, sub-prjet teams using a systemati press. Risk areas dumented in the prjet file 3 Risk areas identified by mst, and all key, sub-prjet teams using a systemati press. Risk areas dumented in the prjet file 4 Risk areas fr eah sub-prjet determined systematially and dumented in the prjet file 5 Review Prjet Management Press Quality 100. Press quality imprvements dumented and, where apprpriate, implemented N press quality review dne 1 Press quality reviewed by prjet manager. N dumentatin 2 Press quality reviewed by prjet manager. Imprvements dumented in the prjet file 3 Press quality reviewed by the re team and ptential imprvements dumented in the prjet file 4 Press quality reviewed with prjet team and ptential imprvements dumented in the prjet file alng with an implementatin plan 5 Update Prjet Status 111. Updated shedule, resure prfile, spes and quality data refleted in the prjet file N updating f data 1 Infrmal update f sme prjet elements/n file 2 Infrmal update and arhiving f all prjet elements 3 Frmal update f all prjet elements but withut string in file 4 Frmal update f all prjet elements stred in prjet file 5 Determine the Cause 116. The rt ause f eah signifiant variane identified and dumented in the prjet file N rt ause analysis/n prjet file 1 Infrmal, undumented rt ause analysis 2 Frmal but infrmally dumented and stred rt ause analysis 3 Frmal analysis and dumentatin f rt ause but withut a prjet file 4 Frmal analysis and dumentatin f rt ause with arhiving in prjet file 5 C-5

Create a Career Path fr Prjet Managers 143. Clear prmtin path available fr prjet managers, and path mmuniated t rganizatin N prjet management prmtinal path available; prjet management nt seen as valuable fr ther areer paths 1 Prjet management regnized as helpful, but nt required t supprt prmtin thrugh ther areer paths 2 Prjet management experiene desired fr ther areer paths and sme prmtinal pprtunities fr prjet management, but path nt integrated with ther areer hies 3 Prjet management experiene required fr prmtin alng ther areer paths, sme prmtinal pprtunities within prjet management areer path 4 Cmplete prjet management prmtinal path available in supprt f, and parallel t, ther prmtinal paths (e.g., funtinal, tehnial, et.) and mmuniated t rganizatin 5 C-6

Appendix D Benhmarking Study Partiipants The fllwing firms partiipated in the benhmarking study: Advaned Graphis (Swiss) AFAG (Swiss) Ammann (Swiss) Apple Cmputer AT&T Australian Army Engineering Ageny Behtel Crpratins Bell Atlanti Bell Suth Telemmuniatins C. Overaa Chevrn Cntra Csta Eletri Digitrn AG (Swiss) Dn Tdd Assiates East Bay Muniipal Utility Distrit Eihley Engineers Federal Express GeWrks GFAI (Swiss) Great Plains Sftware GTE Hewlett Pakard Internatinal Business Mahine Internatinal Harvest Kdak Luent Tehnlgies Nrthwestern Mutual NYNEX Prtr and Gamble San Dieg Gas and Eletri Shindler (Swiss) Shard (Swiss) Sun Mirsystem Williams Gas and Pipeline D-l

Appendix E Interview Questins This appendix ntains a typial distrit visit questinnaire. E-l

USACE Prgram and Prjet Management Prjet Management Business Presses Interview Questins This list f questins will be vered by the LMI study team during the distrit visits. These questins are designed t help prvide insight int hw eah distrit nduts prgram and prjet management in the exeutin f Crps prjet delivery. During the distrit visits, the LMI study team will meet with distrit PMs and ther prjet team members t disuss the typial prjet management business presses (PMBP) fr Military Prgrams (MP) and Civil Wrks Prgrams (CW) prjet life yle. The draft prjet management business press flws (fund at http://glbe.lmi.rg/usae) will be used as a familiar frame f referene t help guide the disussins. Our bjetives are: t determine hw, when, and where the prjet management business presses are implemented at eah distrit, t determine if there are standard prjet management business press flws used in the Crps, and t identify any best praties that uld be shared and inrprated in a distrit, divisin, r thrughut the Crps. Setin 1: Prjet Management Business Presses (PMBP) Hw des the reginal business enter (RBC) initiative affet yur rle (prjet manager, engineering r nstrutin team member) with respet t prjet management? What are sme f the majr hanges in PM that have urred as a result f the RBC nept? Please desribe sme f them. Hw d the distrit's prjet management business praties relate t the fllwing areas? Spe management Time management Cst management Quality management Integratin management Risk management Team management Cmmuniatins management Prurement management 4. Hw was prjet management implemented in yur distrit? Hw were diffiulties reslved? What were (are) sme f the diffiult prblem areas r barriers? Hw did (will) yu reslve these? D yu use prjet management plans? On what types f prjets? What d they nsist f? Is there any frmal/infrmal guidane n PMPs and their implementatin? Hw ften is the PMP fr a prjet updated? Is the PMP an effetive management tl? E-3

5. Hw d yu handle prjet and prgram risk within the distrit? D yu have a frmal, and/r infrmal, risk identifiatin and mitigatin prgram that yu use fr prgram, prjet, and tehnial aspets f a prjet? 6. CW Budgeting: Hw d yu aunt fr and manage the st and shedule turbulene reated by ngressinal/prgrammati funding inreases r dereases in the budgetary press? D yu trak this infrmatin? At what level? 7. What is yur upward reprting requirement? What types f reprts are yu required t submit t higher headquarters? 8. After the interview sessin, please review the PMBP press flws pertinent t yur prgram area (CW, MP, Envirnmental). Yu an aess these flw harts at: http://glbe.lmi.rg/usae D these press flws represent an aurate prtrayal f the urrent prjet delivery press in yur distrit? What hanges wuld yu make t the press harts? Please frward yur mments t Jhn Dettbarn (LMI) at idettbar@lmi.rg r by fax at (703) 917-7476. Setin 2: Prjet Perfrmane 1. Des the distrit have any metris in plae (in additin t the CMR requirements) t measure urrent prjet perfrmane in the areas f st, shedule, and quality? What are they? D yu use yur wn infrmal metris? When are they alulated (e.g., at what milestne r in what time perid)? Using the PMBP flw harts, indiate the ativities in whih yu alulate yur perfrmane metris. Hw are they used within the distrit? Hw lng have yu been using them? Are they useful t yu? 2. Are there any areas that yu believe yu shuld measure but d nt have aess t the data r the data is nt lleted? Setin 3: Prjet Management Perfrmane 1. Hw many prjets d yu manage? What is the ttal dllar value f these prjets? 2. Are any metris in plae t measure urrent prjet management perfrmane? What are they? D yu use yur wn infrmal metris? When are they alulated (e.g., at what milestne r in what time perid)? Using the PMBP flw harts, indiate the ativities in whih yu alulate yur perfrmane metris. Hw are they used within the distrit? Hw lng have yu been using them? Are they useful t yu? 3. Hw d prjet management teams measure their perfrmane? 4. What PM management infrmatin system d yu use t d this? Hw d yu interfae with CEFMS, PROMIS, and ther legay infrmatin systems? E-4

Setin 4: Prjet Management Organizatin and Teaming 1. Wh is n a prjet team? Hw d yu frm these teams? 2. What rle des the ustmer play in the prjet teams? Wh handles ustmer interfae? 3. The grup disussins and respnses t the abve questins (plus the rganizatinal infrmatin prvided by eah distrit) will help the study team larify the fllwing areas: the relatinship between PM and the funtinal rganizatins (ED, CD, RE, et.) the atual rles and respnsibilities f the PM team integratin f planning, design, engineering, aquisitin, nstrutin, and wner issues team mmuniatins (sharing f infrmatin, interatins, et.) rganizatinal ntrl and dispute reslutin in prjet teams adequay f prjet team (inluding PM) training Interview attendees: Name Psitin / Offie Telephne Fax E-mail Experiene Years in PM-type Wrk Prgram(s) Distrit Mailing Address E-5

Appendix F Detailed PMBP The fllwing hart depits the typial ativities required in perfrming prjet management fr an LRD prjet. F-l

Distrit PMBP fr PMI Prjet Management Knwledge Areas Identify Need fr Prjet Cnept Phase Establish Limits f Authrity fr Deisin-making fr Allatin f Prjet Resures Frm Strategi Managern Spe Management i r Define Initial Spe Establish Initial Prjet Objetives Establish Feasibility Apprve Prjet; Establish Strategi Pririty Develp Wrk Breakdwn Struture Time Management Define fi- Prjet Ativities Atfyijtyili'st: äü'ppprtifigjds Cst Management Develp Basi Budget & Shedule Update Resure Planning System Risk Management Review Lessns Learned Identify Ptential Risk Areas ::: Sures f risk ;: :;Risk symptms Quality Management Define Quality Teh, st, shedule quality.baselines Prurement Management Team Management Define Prjet Management Pliies, Predures, & Tehniques Make Key Persnnel Assignments Establish Standards fr Authrity, Respnsibility, Auntability f Team Cmmuniatins Management <J-

WBP fr Prjet Life Cyle Strategi Management Bard Develp Wrk Breakdwn Struture WBS Define Prjet Ativities : Ativity list : Süpprtirtj :defeü;:; Sequene Ativities ;: Pfbjeä; rietvyfk-s;: \!; ÄdtJyhy ifet iifbjateis;: Estimate Ativity Duratin i: ;Äyiyi^:du^tigri:psti!Ti^tie$: Basis f estimates Prjet shedule^;.: Ödieidüle:mgt;p;ia;n;: Resiirie reqmt;üpdätss: Refine Prjet Cst Estimate & Budget Cst estimates Cst mgt plan Develp Resure Plan Update Resure Planning System ; Sures f risk : Risk symptms Identify Prjet Risks; Review Lessns Learned z * Quantify Risk ;Qppq>rturii)i$sv tp: pur$ije;: Opprtunities t ignre Develp Risk Respnse : Risking* plan Cntingeny plans Define Quality Identify Custmer Expetatins /x../v. h, st, shedule.quality.basalines. : Develp Aquisitin Strategy laqüisitiöri ptan ; : : Statement(s) f wrk f Define Prjet Organizatinal Apprah Organizatin design fr team Build Prjet Team Identify & assign prjet rles Define Team Member Needs Establish Team Rewards Prgram Develp Cnsensus Deisin-making Tehniques fr Prjet Team Define Cmmuniatins Prtl

Develp Prjet Shedule. : Prjet shedule. :..... il^eijiiiielfngtpilkn;: j:j:: :: :; Resöiireej röqmtjüpdaiös:: j Integrate int Management Plan Refine Prjet Cst Estimate & Budget Cst estimates Cst mgt plan Develp Resure Plan Update Resure Planning System Develp Prjetspeifi Perfrmane Measurement * Plan Risk ise. ^iskmötp'lanli:: Cntingeny plans _r\ : :Aqüisitiöh ptärt: : : Statement(s) f wrk Define Team Member Needs Assess Team Mtivatin Fatrs I Establish Team Rewards Prgram Develp Cnsensus Deisin-making Tehniques fr Prjet Team Prepare Plan fr inreasing Partiipative Management Page 1 f 2 1 September 2000

mm US ACE Prjet Life Cyle Phases (Typial) Engineering rianning P i_,unsiiuuiiuii and Design A A ii Operatins and Maintenane -er -r Mnitring, Evaiuating, and Cntrlling Cyle Perfrmane Standards Frm: Strategi pliies, Prjet team deisins Take Crretive Atin ir Observe Perfrmane Status reprts Prgress reprts Freasts i i Evaluate Atual Perfrmane; Identify Rt Cause Management Respnsibilities Thrugut the prjet life yle, the PM is respnsible fr team develpment, effetive mmuniatins, and perfrmane imprvements. PM als respnsible fr mmuniating with the ustmer t prvide feedbak and reslve issues that arise during exeutin. Chek varianes frm the management plan in the areas f - st, - spe, - shedule, - quality - team perfrmane, - prjet management press perfrmane, and - ther, as defined in perfrmane measurement area f plan. Tls and tehniques inlude the fllwing: - Change ntrl system - Cnfiguratin management - Perfrmane measurement - Additinal planning - Prjet management infrmatin system.

SM!&?'i.*1 Bra Transfer Prjet Reassign Terminate and Prjet Team n Prjet Respnsibility Members i k Reward Persnnel 1 ' Cndut Pstm rtem Dument Lessns -learne J Page 2 f 2 1 September 2000

Appendix G Prdut Delivery Presses The fllwing harts depit the ativities and presses required in delivering a prjet in the ivil wrks and military prgrams. G-l

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