The Value of Project Management

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A1 The Value of Project Management

(A1.P1)

There are some companies that have built reputations for being able to consistently manage projects effectively. However, the vast majority of organizations have a more spotty reputation. Does your organization have any of the following characteristics?

• Projects completed late, over-budget, or without meeting the functionality requirements of your client
• Weak standard processes and techniques used inconsistently by project managers
• Project management is reactive and not seen as providing value
• The time required to manage projects proactively is not built into the schedule
• Project management is considered ‘overhead’
• Projects are “successful” in spite of a lack of planning and project management, by “heroes” that overcome heavy stress and overtime work to get the job done

Good project management discipline is the way to overcome these shortcomings. Having good project management skills does not mean you have no problems. It does not mean that risks go away. It does not mean that there are no surprises. The value of good project management is that you have standard processes in place to deal with all contingencies.

Project management processes and techniques are used to coordinate resources to achieve predictable results. However, it should be understood that project management is not an exact science and there is never a guarantee of success. Since projects involve people, there is always complexity and uncertainty that cannot be absolutely controlled.

Project management is both science and art. It is science in that it relies on proven and repeatable processes and techniques to achieve project success. It is an art because it also involves managing and relating to people and requires the project manager to apply intuitive skills in situations that are totally unique for each project. A good project management methodology provides the framework, processes, guidelines and techniques to manage the people and the work. A good methodology increases the odds of being successful and therefore provides value to the organization, the project and the project manager.

The value proposition for project management starts with the proposition that it takes time and effort to proactively manage a project. This cost is more than made up for over the life of the project by:

• Completing projects more quickly and cheaply. One of the biggest benefits of using a common methodology is the value of reuse. Once the processes, procedures and templates are created, they can be used (perhaps with small modifications) on all projects in the future. This results in reduced project start-up time, a shorter learning curve for project team members and time savings from not having to reinvent processes and templates from scratch on each project.
• Being more predictable. One of the first benefits that should occur with good project management processes is that you will be more predictable. You will find that if you do a better job of planning you will better understand the work to be accomplished, and you will do a better job of estimating this work. Then as the project progresses you will do a better job of managing the work to hit your estimated schedule and budget. This ability to be predictable is crucial when your company is making business decisions about which projects to execute. You should strive to achieve a level of predictability of 80%. In other words, 80% of your projects will finish on-time and within budget.
• Saving effort and cost with proactive scope management. Many projects have difficulty managing scope, which results in additional effort and cost to the project. Having better project management processes will result in being able to manage scope more effectively.
• Better solution “fit” the first time through better planning. Many projects experience problems because there is a gap between what the client expects and what the project team delivers. Using a methodology results in better project planning, which gives the team and the sponsor an opportunity to make sure they are in agreement on the major deliverables produced by the project.
• Resolving problems more quickly.  Some teams spend too much time and energy dealing with problems because they do not know how to resolve the problems. Having a proactive issues management process helps ensure that problems are resolved as quickly as possible.
• Resolving future risk before the problems occur. Project management includes processes to identify and manage risks. Sound risk management processes will result in potential problems being identified and managed before the problems actually occur.
• Communicating and managing expectations with customers, team members and stakeholders more effectively. Many problems on a project can be avoided with proactive and multifaceted communication. In addition, much of the conflict that does arise on a project is not the result of a specific problem, but because of surprises. Project management focuses on proactive formal and informal communication, which results in fewer surprises.
• Building a higher quality product the first time. Project management contains quality management processes that will help the team understand the needs of the customer in terms of quality. Once those needs are defined, the team can implement quality control and quality assurance techniques to meet the customer expectations.
• Improved financial management. This is the result of better project definition, better estimating, more formal budgeting and better tracking of the project actual costs against the budget. All this rigor results in better financial predictability and control.
• Stopping “bad” projects more quickly. “Bad” projects are those where the cost-benefit justification no longer makes sense. A project may have started with sound cost-benefit justification. However, if the project is late and over-budget it may hit a threshold where the business case is no longer valid. Effective project management allows you to see these situations earlier so that you can make better decisions to re-scope or cancel the project.
• More focus on metrics and fact-based decision making. One of the more sophisticated aspects of project management is that it provides guidance to make it easier to collect metrics (measurements). Metrics give you information that helps you determine how effectively and efficiently your team is performing and the level of the quality of your deliverables. Metrics also give you the information necessary to validate whether or not you were successful.
• Improved work environment. If your projects are more successful, you will find additional intangible benefits associated with your project team. Your customers will have more involvement, your project team will take more ownership of the project, morale will be better, and the project team will behave with a greater sense of professionalism and self-confidence. This should make sense. People that work on projects with problems tend to be unhappy. On the other hand, people on successful projects tend to feel better about their jobs and themselves.

People who complain that project management is a lot of ‘overhead’ forget the point. All projects are managed. The question is how effectively they are managed. For instance:

• Your project is going to face issues. Do you want to proactively resolve them or figure them out as you go?
• Your project will face potential risks. Do you want to try to resolve them before they happen or wait until the problems arise?
• Are you going to communicate proactively or deal with conflict and uncertainty caused by a lack of project information?
• Are you going to manage scope or deal with cost and deadline overruns caused by doing more work than your budget covers?
• Are you going to build quality into your process or fix problems later when they will be more costly to resolve?

The characteristics of the project are not going to change whether you use a formal project management process or not. What changes is how the events are dealt with when the project is in progress. Are they dealt with haphazardly and reactively or proactively with a smoothly running process?

Generally, it is believed that organizations that follow good processes are more successful than organizations that do not. Organizations that have good processes, and follow them, are sometimes called “Process Driven Organizations”. These organizations get more work done and they tend to do the work that is of most value. They also have organizational systems in place to help make everyone more successful, including project managers.

Why Doesn’t Everyone Practice Effective Project Management? (A1.P2)

After reading this section so far, you might wonder why everyone does not utilize good project management techniques. Or you might ask yourself – “why aren’t I using them?” There are usually a couple reasons.

• It requires an upfront investment of time and effort. Many people consider themselves to be ‘doers’. They might not be as comfortable with their planning skills. For example, many times there is a tendency to discuss a problem, and then go out and fix it. This works when you have a five-hour change request. It doesn’t work on a 5,000-hour project. Resist the urge to jump in. The project will be completed sooner if you properly plan it first and then have the discipline to manage the project effectively.
• Your organization is not committed. It’s hard to be a good project manager in an organization that doesn’t value project management skills. For instance, if you take the time to create a Project Charter document and your client asks why you were wasting your time doing it, you probably are not going to be very excited about the planning process on your next project. To be most effective, the entire organization must support a common project management process.
• You don’t have the right skills. You may find that the lack of project management processes is not a matter of will, but a matter of skill. Sometimes people are asked to manage projects without the training or the experience necessary. In those cases, they struggle without the right tools or training to manage projects effectively. Your organization also may not have a Project Management Office (PMO) or other organization that is responsible for deploying these project management skills.
• Senior managers think that project management is a tool. When you discuss project management with some managers, they initially think you are trying to implement a tool that allows you to be a better project manager. Actually, if it were a tool, you might have more luck convincing them of the value. Even though some aspects of project management, like the creation and management of the schedule, may utilize a tool, that is not where the value of project management is. The value is in the disciplined utilization of sound, consistent processes.
• You may have been burned (or buried) in the past. When you start talking about processes, best practices and templates, some managers immediately start to think about overhead, delay and paperwork. They fail to immediately connect with the value that a methodology brings. A common criticism of methodology is that it is cumbersome, paper intensive and takes too much focus away from the work at hand. Sometimes this criticism is a legitimate concern, caused by not scaling the methodology appropriately to the size of your project. For instance, if you were required to develop a fifteen page Project Charter document even if your project is only 250 hours, you may have been turned off by project management methodology. However, this is not a methodology problem as much as it is a misapplication of the methodology.
• There is a fear of control from team members. Many people like to be able to do their jobs creatively and with a minimum of supervision. They fear that formal project management techniques will result in tight controls that will take the creativity and fun out of the work. To a certain extent they are right. However, common processes and procedures eliminate some of the creativity in areas where you probably don’t want it in the first place. You don’t need to be creative when dealing with scope change, for instance. You just need to follow the standard processes that are already in place.
• There is a fear of the loss of control from management. If you really want to effectively implement a project management discipline at your company, you must give a level of control and authority to the project manager. Some organizations and middle managers do not want to lose that control. These middle managers may want project managers to coordinate the projects, but the middle manager wants to make all the decisions and exercise all the control. Formal project management will not be possible in organizations where this fear is prevalent.

Some of these fears are natural and logical, while others are emotional and irrational. Although these may be reasons to be hesitant about using formal project management, they must be overcome. The bottom line on project management is this – if the result of project management was that projects would take more time, cost more and have poor quality, it would not make sense to use it.

In fact, the opposite is true. Using sound project management techniques and processes will give you a higher likelihood that your project will be completed on time, within budget and to an acceptable level of quality.

That being said, when you use a project management process, be smart. Don’t build the project management processes for a ten thousand hour project if your project is only two hundred hours. Consider all aspects of how to manage a project and build the right processes for your specific project.

Options for Obtaining a Methodology (A1.P3)

To successfully implement a project management methodology, first convince yourself that there is value if the processes are applied and utilized correctly. In fact, all projects use a mixture of processes, procedures and templates. If you don’t think you have any, it really means that you have poor and informal ones.

If you need a good project management methodology, there are two major sources.

1. Build one yourself. You can build a custom methodology that perfectly reflects the philosophy and best practices of your organization. Many companies continue to do this today.
2. Buy one. If you build a methodology, you might be surprised to learn that it ultimately looks similar to most other project management methodologies that people use. No matter how you structure it, you still need to plan, build a schedule, manage scope and risks, communicate, etc. Therefore, many companies choose to buy or license a pre-existing methodology. These pre-built methodologies usually have everything your organization needs to be successful.

Of course, if you buy a methodology, you still may need to customize it to meet the specific needs of your organization. This gives you the benefits of option 1, while also taking less effort and cost, which is the major benefit of option 2.