1 / 18

Using project management to control business costs Richard Evans MPUG Puget Sound Chapter Meeting April 21 st 2009

Using project management to control business costs Richard Evans MPUG Puget Sound Chapter Meeting April 21 st 2009. Paris. Ann Arbor. Toronto. Cologne. London. Chicago. Seattle. New York. San Francisco. Washington, DC. Los Angeles. Hong Kong. Denver. Brisbane. Sydney.

teddy
Download Presentation

Using project management to control business costs Richard Evans MPUG Puget Sound Chapter Meeting April 21 st 2009

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Using project management to control business costsRichard EvansMPUG Puget Sound Chapter Meeting April 21st 2009

  2. Paris Ann Arbor Toronto Cologne London Chicago Seattle New York SanFrancisco Washington, DC Los Angeles Hong Kong Denver Brisbane Sydney Canberra Melbourne Pcubedhas been shaping the most critical programs and project portfolios since before it became a necessity. Pcubed’s customers constitute a quarter of the Fortune 500 Pcubed • Specialists in strategy and execution of large program management and project portfolio management • 350 professionals globally, currently shaping and delivering over $40bn of client change portfolios • Niche player, providing clients with small teams • Investments in experience and tools

  3. Organizations responding to cost pressures

  4. Summary • 1. Changing investments – portfolio management for projects AND operations Rational response to cost pressures - Less headless chicken behavior - Opportunity for project management skills in operations 2. ‘Lean’ program management to lower the cost and risk of major programs AND of operations

  5. 1. Changing investments – portfolio management for projects AND operations Rational response to cost pressures - Less headless chicken behavior - Opportunity for project management skills in operations • 2. ‘Lean’ program management to lower the cost and risk of major projects and operations programs

  6. Capital Management – Energy Industry • Challenged to find a rigorous and proven approach for selecting the optimal, billion dollar portfolio of capital expenditure in Global Refining, while still maximizing Return On Capital Employed • Reduced project portfolio by $400M in response to capital spending reductions while still protecting strategic initiatives • 3 yr capital portfolio optimized on strategic impact & financial return • View of strategic health of capital project pipeline • Transparency of decision making • Reviewed various methodologies for assessing the strategic value of proposed capital projects, settling on a solution that includes analytic hierarchy processing (AHP). • Optimized the 3 year capital project portfolio for Global Refining. • Drove for enhanced information on business case & benefits of all capital expenditure. Move Up -Maximize Value for same budget Portfolio Strategic Value Move Left –Reduce Costs & Maintain Value Portfolio Cost $ Results

  7. Benefits Realization - Government • $3 billion program to join criminal justice (police, courts, jails, etc.) services • Late projects, over budget, no business cases, potential to lose funding • Saved $225M through performance optimization • Technology services now contribute to strategic goals • Clearer prioritization and overall operations management “As a consequence of unsatisfactory results, U.K. Criminal Justice IT decided to overhaul its portfolio and performance management practices, which led to restoring funding confidence within the organization.” ~ Andrea Di Maio, Gartner • Utilized benefits realization management approach to cover entire life cycle, from business case submission to actual benefit realization assessment • Three distinct, tightly related phases: portfolio prioritization, active benefits management, performance management Results

  8. 1. Changing investments – portfolio management for projects AND operations Rational response to cost pressures - Less headless chicken behavior - Opportunity for project management skills in operations • 2. ‘Lean’ program management to lower the cost and risk of major projects and operations programs

  9. Thinking “Lean” Lean • economical and efficient • not using any more resources than are necessary • - Encarta Dictionary • Waste Duplication of Effort Inconsistency • Muda…Muri…Mura • Unnecessary motion – people moving more than is required to perform the processing • Waiting – waiting for the next production step • Overproduction – production ahead of demand • Defects – the effort involved in inspecting for and fixing defects • etc AVOID

  10. Lean Program Management

  11. Delivering the Olympic Games • Olympic Games - London 2012 • “People will want to know there is transparency, we are accountable, that costs don’t run out of control and we won’t leave white elephants behind.”David Higgins CEO, Olympic Delivery Authority 2012 38 Programs,1200 projects, 5500 milestones, 1 unmovable deadline • Robust early definition to prevent downstream failure pay now or pay later • Early Confirmation of: • Will project deliver? • Is Business case valid? • Are stakeholders on board? • ‘Light’ but effective governance structures that allow best in class suppliers to do it their own way, while giving the needed visibility, insight and control • World class issues management and progress tracking

  12. Meeting paralysis, no time for “real work” • ‘Hero’ dependency • Getting to an agreed implementation approach and a robust integrated plan • Access to executive calendars become the default program critical path • Organizational “silos” block progress • Poor confidence in delivery • Lack of an unbiased view of status, especially with suppliers or vendors • Frustration with constant surprises (delays, cost overruns, technical issues, unforeseen changes) • Lack of clear responsibility / accountability results in parallel and wasted effort • Inability to identify critical program work and align effort to it • Inability to control change and prevent unwanted work Complex Program Challenges

  13. Integrate cultural and organizational factors to achieve one team • Single point source for communications and data • Actively get people together to align teams and enable continuous improvement • Ensure efficient meetings to manage across geographies, organizations and functions • Drive effective collaboration by integrating the work of interdependent stakeholders through implementing team structures • Disciplined governance structures that effectively align executive and team behaviors to keep critical work moving • Timely, fact-based decisions and inputs of executive help/expertise • Specific tracked actions for resolution of key issues & risks • Effective change management • Quality reports and data to the right level of decision authority • Focus resource expertise on critical work Organizing for lean PM Direction & Steering Decision Making Integration Escalation Team 1 & Reporting Team 2 Team 3 Business Lines Departments External Vendors

  14. Reducing cost and risk with a framework Govern Transformation Identify Define Deliver Close Establish Program Manage Program Delivery & Benefits Realization Operate Develop Strategy & Vision Develop Benefits Manage Releases Transition Manage Projects Develop Blueprint Develop Delivery Plan Develop Business Case Manage Business Change Manage Services and Suppliers Build & Embed Transformation Capability

  15. Lean Operations

  16. Executing lean…in strange places • The Toyota Way consists of 14 principles, not all are applicable to every industry • Select 2 or 3 as a proving ground for cultural change. Key principles include: • Continuous improvement • Building a culture of stopping to fix problems to get work right the first time • Developing leadership that thoroughly understands the Lean philosophy • Developing teams across processes • Development of metrics - five or six at most - of key performance indicators (KPIs) that enable the organization to gauge its progress. • Obstacles include getting leadership to take ownership of problems, especially in a matrix environment. In a culture where the lowest person can stop the entire production line if he or she sees a problem that needs fixing, the classic hierarchy thinking has to be diminished.

  17. Summary • 1. Changing investments – portfolio management for projects AND operations 2. ‘Lean’ program management to lower the cost and risk of major programs AND of operations - Opportunity for project management skills in operations

  18. Items to research: • The Toyota Way • MSP – Managing Successful Programs richard.evans@pcubed.com

More Related