QUALITY AND PERFORMANCE IN PROJECTS Project Management and Leadership 2015D, PhD, PMP
Our PROGRAMME: 1. INTRODUCTION TO PROJECT MANAGEMENT 2. STARTING A PROJECT 3. WORK MOTIVATION 4. COMMUNICATION 5: TEAMS AND TEAMWORK 6: LEADERSHIP 7: SCHEDULING AND TIME MANAGEMENT 8: MONEY AND CONTRACTS 9: QUALITY AND PERFORMANCE IN PROJECTS 10: RISKS AND CRISES 11: PROJECT EXECUTION AND CLOSURE 12: THINKING IN A PROJECT January 15 Mo Tu We Th Fr Sa Su 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 February 15 Mo Tu We Th Fr Sa Su 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
QUALITY
The PROJECT MANAGEMENT TRIANGLE TIME QUALITY COST SCOPE
QUALITY Degree to which a set of inherent characteristics fulfills requirements 19.2.2015 6
Think QUALITY Building a house Organizing a conference Publishing a paper 19.2.2015 7
GRADE a category assigned to products or services having the same functional use but different technical characteristics 19.2.2015 8
Think GRADE Building a house Organizing a conference Publishing a paper 19.2.2015 9
VIEWS of Quality changed PAST The responsibility of workers Defects should be hidden Quality problems lead to conflicts Corrections should be minimally documented Increased quality will increase project costs Quality is internally focused Quality will not occur without close supervision Quality occurs during project execution PRESENT Everyone s responsibility Defects should be brought to the surface Quality problems lead to cooperative solutions Documentation is essential for lessons learned Improved quality saves money Quality is customer focused People want to produce quality products Quality occurs at initiation and must be planned for (mod. KERZNER 2009, p.874)
HIGHLIGHTS: 1. QUALITY IS THE DEGREE OF FULFILLING REQUIREMENTS 2. GRADE CAN BE HIGH, BUT QUALITY LOW 3. VIEWS OF QUALITY HAVE DRAMATICALLY CHANGED SINCE 1950s
QUALITY MANAGEMENT processes 1. PLAN quality: identify quality requirements and/or standards for the project and product, and document how the project will demonstrate compliance 2. PERFORM quality ASSURANCE: audit the quality requirements and the results from quality control measurements to ensure appropriate quality standards and operational definitions are used 3. PERFORM quality CONTROL: monitor and record results of executing the quality activities to assess performance and recommend necessary changes 19.2.2015 13
How to PLAN Cost-benefit analysis Cost of Quality Benchmarking Flowcharting Proprietary QM methodologies 19.2.2015 14
COST OF QUALITY 19.2.2015 15
BENCHMARKING A popular method for developing requirements and setting goals (!) Can be defined as measuring your performance against that of best-in-class companies, determining how the best-in-class achieve those performance levels, and using the information as the basis for your own company s targets, strategies, and implementation. Focuses on practices that produce superior performance. (PYZDEK & KELLER 2010, p.112-116) 19.2.2015 16
OUTPUTS of PLAN quality Quality Management Plan Quality metrics Quality checklists Process improvement plan Project document updates 19.2.2015 17
QUALITY METRIC A QUALITY METRIC an operational definition that describes, in specific terms, a project or product attribute and how the quality control process will measure it. A MEASUREMENT is an actual value. TOLERANCE allowable variations on the metrics. 19.2.2015 18
PROCESS CONTROL CHART (WATERS 2011, p.470) 19.2.2015 19
Three adages about measuring to manage If it cannot be measured, then it cannot be managed What gets measured gets done You never really understand anything fully unless it can be measured (KERZNER 2011, p.72)
The PURPOSE of metrics is to provide the right information to the right person at the right time (KERZNER 2011, p.ix)
Characteristics of a GOOD METRIC Has a need or a PURPOSE Provides useful INFORMATION Can be measured with reasonable ACCURACY Assists in assessing the LIKELIHOOD of success or failure ACCEPTED by the stakeholders as a tool for informed decision making
PROCESS IMPROVEMENT PLAN details the steps for analyzing processes to identify activities which enhance the value of these processes Areas to consider include: Process boundaries Process configuration Process metrics Targets for improved performance 19.2.2015 23
How to PERFORM QUALITY ASSURANCE Quality audits Process analysis 19.2.2015 24
A QUALITY AUDIT a structured, independent review to determine whether project activities comply with organizational and project policies, processes, and procedures. Its objectives: Identify all the good/best practices being implemented Identify all the gaps/shortcomings Share the good practices introduced/implemented Proactively offer assistance to improve implementation Highlight contributions of each audit in the lessons learned repository. 19.2.2015 25
The 5 WHYs technique A technique for exploring the cause-effect relationships for a problem area by probing with a single question WHY? Works only to start an investigation into causes. A simple test for each answer is to ask, If I get rid of this cause, will the problem disappear? This technique works best if each answer can be verified before asking the next WHY? Keep the focus on what and away from who. (KAMAUFF 2010, p.45-46)
OUTPUTS of PERFORM ASSURANCE Project management plan updates Change requests 19.2.2015 27
How to PERFORM QUALITY CONTROL Inspection Statistical sampling Pareto chart 19.2.2015 28
PARETO CHART A histogram, ordered by frequency of occurrence, that shows how many results were generated by each identified cause. 19.2.2015 29
HIGHLIGHTS: 4. QM CONSISTS OF PLANNING, CONTROLING AND (!) ASSURING 5. COST OF QUALITY: NONCONFORMANCE COSTS ARE ALWAYS HIGH 6. PARETO CHART ILLUSTRATES THE UBIQUITOUS 80/20 RULE
PERFORMANCE
A PROJECT is a SYSTEM It can get out of balance The longer we wait to fix, the longer it takes to return to equilibrium The controls must be designed to discover out-of-balance situations early and put get-well plans in place quickly. (mod. WYSOCKI 2012, p.280) 19.2.2015 33
PROJECTS PROGRESS WELL UNTIL 70% Projects seem to progress quickly until they are about 60-70% complete. During that time, everyone applauds that work is progressing as planned. Then, perhaps without warning, the truth comes out and we discover that the project is in distress. This occurs because of: Our disbelief in the value of using project s metrics Selecting the wrong metrics Our fear of what project health checks may reveal (mod. KERZNER 2011, p.48)
A PROJECT IN DISTRESS The project has exhibited a performance trend that, continued, will result in failure The project s performance has exceeded metric values and is a high risk for failure The project has recently experienced a significant change that may result in failure (WYSOCKI 2014, p.448)
Why projects become distressed? Poor, inadequate, or no requirements documentation Complexity of requirements not recognized Unmanageable project scope Inappropriate/insufficient sponsorship Unwillingness to make tough decisions Lag time between project approval and Kick-Off No credibility in the baseline plan No plan revision after significant cuts in resources Estimates done with little planning or thought No performance monitoring
EARNED VALUE MANAGEMENT (EVM) A commonly used method of performance measurement integrating project scope, cost, and schedule measures to help the team assess and measure project performance and progress. EVM develops and monitors three key dimensions for each work package and control account: PLANNED VALUE (PV) EARNED VALUE (EV) ACTUAL COST (AC) 20.2.2015 37
The three horsemen of EVM PLANNED VALUE (PV): the authorized budget assigned to the scheduled work to be accomplished for a schedule activity or work breakdown structure component. EARNED VALUE (EV): the value of work performed expressed in terms of the approved budget assigned to that work for a schedule activity or work breakdown structure component. ACTUAL COST (AC): total costs actually incurred and recorded in accomplishing work performed during a given time period for a schedule activity or work breakdown structure component. 20.2.2015 38
VARIANCES from the baseline SCHEDULE VARIANCE (SV): a measure of schedule performance SV = EV PV. Can indicate a project falling behind its baseline schedule. COST VARIANCE (CV): a measure of cost performance CV= EV AC. CV at the end of the project will be the difference between the budget at completion (BAC) and the actual amount spent. CV is particularly critical because it indicates the relationship of physical performance to the costs spent. 20.2.2015 39
PERFORMANCE INDEXES SCHEDULE PERFORMANCE INDEX (SPI): a measure of progress achieved compared to progress planned. SPI = EV/PV. SPI<1.0 indicates less work was completed than was planned. SPI>1.0: more work was completed than planned. COST PERFORMANCE INDEX (CPI): a measure of the value of work completed compared to the actual cost or progress made. CPI = EV/AC. Is considered the most critical EVM metric and measures the cost efficiency for the work completed. CPI<1.0 indicates a cost overrun for work completed. CPI>1.0: cost underrun of performance. 20.2.2015 40
COST/SCHEDULE performance (20 months) Months of the project life (NICHOLAS 2008, p.437) 41
LIMITATIONS of the metrics in EVM TIME and COST are basically the only two metrics QUALITY and VALUE of the project cannot be calculated using only Time and Cost Completing a project within time and cost does not imply success of a project Unfavorable metrics do not provide us with information for corrective action Stakeholders do not always understand the meaning of these metrics. (mod. KERZNER 2011, p.70) 19.2.2015 44
TYPES of performance measures RESULT INDICATORS (RIs): what you have done. PERFORMANCE INDICATORS (PIs): what to do (PARMENTER 2010, p.1-2) 20.2.2015 45
KEY PERFORMANCE INDICATORS (KPIs) KEY: a major contributor to success or failure PERFORMANCE: measurable, quantifiable, adjustable and controllable elements INDICATOR: reasonable representation of present and future performance (PARMENTER 2010, p.168)
Attributes of KPI PREDICTIVE: able to predict the future of this trend MEASURABLE: can be expressed quantitatively ACTIONABLE: triggers changes that may be necessary RELEVANT: directly related to the project s success/failure AUTOMATED: minimizes the chance of human error FEW IN NUMBER: only what is necessary (PARMENTER 2010, p.168-169) 20.2.2015 47
Project PROGRESS REPORTING system A reporting system keeps you informed of variables that describe how the project is proceeding compared to the plan. Its characteristics: 1. Provides timely, complete, and accurate status information 2. Must not add much overhead time 3. Is readily acceptable to the team and seniors 4. Warns of pending problems in time to take action 5. Is easily understood by those who have a need to know (mod. WYSOCKI 2012, p.281) 19.2.2015 48
TYPES of project status reports Current period Cumulative Exception (NB: management by exception) Stoplight Variance (mod. WYSOCKI 2012, p.280) 19.2.2015 49
INTERVENTION PROCESS STEPS Determine sponsor expectations and intervention directive Define problem(s) and assign owner(s) Assemble an intervention team and establish a process Conduct Root Cause Analysis and Force Field Analysis Develop corrective action plans Revise project scope Revise project plan and deliverables Gain sponsor approval and authorization to continue the project 20.2.2015 50
Look for SIMPLE OBJECTIVE SOLUTIONS Suppose we want to predict the quality of the vintage for a red Bordeaux wine. A proper linear model for this prediction problem might take the following form: P= w1(c1)+ w2(c2)+w3(c3)+w4(c4) where cn is the value for the nth cue, and wn is the weight assigned to the nth cue. For example, c1 might reflect the age of the vintage, while c2, c3 and c4 might reflect climatic features of the relevant Bordeaux region. To complete the proper linear model, we need a reasonably large set of data showing how these cues correlate with the target property (the market price of mature Bordeaux wines). Weights are then chosen so as to best fit the data: they optimize the relationship between P (the weighted sum of the cues) and the target property. An actuarial model along these lines has been developed (Ashenfelter, Ashmore, and Lalonde 1995). It predicts 83% of the variance in the price of mature Bordeaux red wines at auction. Reaction in the wine-tasting industry to such models has been somewhere between violent and hysterical (Passell 1990). 19.2.2015 51
A predictive model for YOUR project s success Interest of senior management in the outcome (measured as a number of communications, intensity of,?) Experience of the leader, team (KO) Experience of working together No. of meetings of a team, No. of issues covered,? No. of communication lines
HIGHLIGHTS: 7. PROJECT FAILURE IS A PROCESS 8. EVM IS THE ONLY PERFORMANCE MEASUREMENT TOOL IN PMBOK 9. DEVELOP YOUR OWN KPIs 10. LOOK FOR SIMPLE OBJECTIVE SOLUTIONS