Project Management and Organization Success: An executive briefing to Princeton management

1. Project Management and Organization Success: An executive briefing to Princeton management Michael Knapp July, 2002

2. this Presentation is intended to: Look at the ‘state of play’ & directions in project & program management Look at the value to Princeton of modern program and project management Discuss the roles and responsibilities of senior management in managing successful programs & projects

3. Topics Section A • Project Management: its current status • Why Projects Fail • What’s the ROI? • Project Management: the new perspective Directions in Project & Program Management

4. Section A: Directions in modern project management Project Management – a practical definition • Project Management covers those set of practices designed to: • Deliver specific objectives • Realize clear & measurable benefits • Within a discrete time frame • Manage a budget & resources • Most importantly, projects deliver change and increase value to the organisation, its members and constituency.

5. Section A: Directions in modern project management A clash of cultures? One reason why Universities often struggle with projects and project management is: “If a little change is OK, no change is better.” In other words, being efficient at managing change is not necessarily a high priority for a lot of Universities.

6. Section A: Directions in modern project management What is Project Success? Objectives Project success occurs when we have: • A delighted client (expectations met) • Delivered the agreed objectives • Realised the expected benefits • Met time and budget expectations Time Cost The 'Golden Triangle' of Project Success Note that project success is more than just finishing the project

7. Section A: Directions in modern project management Where project management currently sits Where is Project Management heading? We have the right project skills People understand how PM works 2002 PM delivers results in our organization 1997 PM is critical to company success PM is a core competency 0% 10% 20% 30% 40% 50% 60% 70% • Conclusions: • Project management is seen as being critically important to organization success. • The relevance of project management is increasing. • BUT • Organizations are not prepared to leverage its real value. * PA Consulting report: 1997 - 2002

8. Section A: Directions in modern project management How projects actually perform

9. Section A: Directions in modern project management Principal causes of project failure Senior management show less than optimal commitment Accountabilities are not met Poor alignment with Strategies & Priorities Benefits not defined or not realizable Estimates are wrong. Full life cycle costs were never understood Scope is not set or controlled Insufficient / inappropriate resources The wrong strategy. Time frames too ambitious or too long Inappropriate technology

10. Section A: Directions in modern project management IT has been the traditional focus of projects & project management within a HE organisation Traditional Focus of Projects CEO Strategic IT IT External Affairs Academic Unit n Administration Academic Unit 1 Student Finance HR Operational Service Units Business Units Projects have too often focused on delivering benefits at the operational level

11. Section A: Directions in modern project management A new focus on ROI Why invest in projects? It’s more than just better technology & saving fte! • Positioning the institution • Technology enabling change • Strategic alliances and Joint Ventures • Better financial & administrative performance • Improving services to our various stakeholders Strategic Benefits • Increased research opportunities • Improved communication & collaboration • Improved services to the student • New opportunities in Teaching & Learning • New business opportunities • Raising the academic profile • ‘Ubiquitous connectivity’ enhances academic independence Business & Academic Unit / Tactical Benefits • Improved business process efficiency • Greater process automation • Eliminating waste, duplication & re-work • Improving services to users & end-users • Re-allocating resources to more productive tasks Operational Benefits

12. Section A: Directions in modern project management There are more than just IT projects Business / Organisation change • Re-structuring the organisation • Implementing new methodologies • New business & academic initiatives Business Venture Technology • Joint ventures • In-sourcing • Business Development • Infrastructure • Systems Integration • Communications • T&L technologies • Web-based services Types of Projects Marketing & Promotion Process improvement • Marketing & promotion campaigns • Market & industry research • Business Process Re-engineering • Management Improvement Academic Projects • New / updated Learning Programs • Implementing Learning Technologies • Research Projects • Academic ventures

13. Section A: Directions in modern project management Projects are, firstly, Business Projects Most organizational projects are business projects with a significant technology component. ‘End-to-end’ Project F The ‘End-to-end project’ is designed to deliver business benefits The project is made up of component projects which are aligned with broad areas of responsibility Business Process Re-engineering Project* F F IT Project* Overall accountability resides at a single point The Project Sponsor is whoever will receive the greatest benefits F Implementation Project* * - examples only

14. Section A: Directions in modern project management What Delivers Success • Commit to their accountabilities • Appropriate resourcing & funding • Issues resolution - decision making • Know & understand ‘Project Dynamics’ 1. Supportive & knowledgeable management • Stakeholder management • Risk management • Quality Management • Planning (especially estimating & scheduling) • Scope creep kept under control 2. Good Project Management Practices 3. Good Project Methods • Best Practice ‘know-how’ 4. Skilled Project Managers • They have achieved appropriate competency • Know what they’re doing & keep focused • Recognised as professionals

15. Section A: Directions in modern project management How we deliver more effective projects Individuals’ Competencies Organization Maturity Effective Projects The combination of the ‘culture’ and practices of the organization along with the sum competencies of the individuals in a project governance position (not just the project manager) deliver effective projects. Delivering more successful projects requires a happy marriage of the right organization maturity and the right level of individuals’ competencies.

16. Section A: Directions in modern project management best practice Organisation maturity in managing projects This model is meant to give a very quick ‘snap-shot’ of an organization’s maturity in regards to its ability to effectively manage projects. The model relies on a fairly subjective assessment of a number of indicators which point to the overall maturity of the organization. • Improvement programs formal • Good measurement enables optimization • High risk projects successfully managed • Respect & support of projects Success rate better than 75% competent • Methodology & standards well established & supported • Stakeholders understand & accept accountabilities • Discrete measures support good management • End-to-end projects set up & managed as such • Risks clearly defined & controlled • Project Management accepted as profession Success rate less than 75% aware seat of the pants • Projects formally initiated • Plans endorsed • Varying standards with few disciplines • Methodologies introduced • Stakeholders managed • Projects become business-driven Success rate less than 60% • Projects just ‘happen’ • Poor project initiation • Inadequate buy-in • Poor communication • Inter-dependencies not managed • Insufficient planning • Unknown benefits • Poor standards (if any) Success rate less than 40%

17. Section A: Directions in modern project management • Empathy • Cultural awareness • Respect and equity • Awareness of the environment • Social fairness • Financial management • Resource management • HR management • Business Planning • Operational management Socio-cultural Generic Management Specialist Project Management • Time management • Quality management • Vendor & contract management • Specialist resource & HR management • Scope management • Stakeholder management • Risk management • Communication management All those in a Project Governance position are both aware of the responsibilities of their position, and confident they have the necessary competencies to meet those responsibilities. Competency-based management

18. Section A: Directions in modern project management Project Dynamics Scope & Size Management Practice Resources Project Dynamics describe the way various factors inter-relate in influencing project outcomes. Predicting project outcomes is complex and is often counter-intuitive Project Impact Quality Risk Budget Technology Time Constraints

19. Section A: Directions in modern project management Dynamics and Paradoxes 1. Projects do not perform as if they have a brake and accelerator. 2. Adding resources to a project can slow it down. 3. Taking resources away from a project can speed it up. 4. The more we measure where change comes from, the less change we will measure. 5. Putting a project ‘on hold’ is like being told to ‘breathe less’. 6. Good practice is ‘scaleable down’ but bad practice is not ‘scaleable up’. 7. Projects which include contingency take a shorter time than projects without contingency. 8. High risk projects are often more beneficial than no-risk projects.

20. Section A: Directions in modern project management Project Life Cycle Complete the Project Execute the Project Start the Project • In its simplest representation, a project has 3 phases it passes through: • It has a start • It has a middle (where a lot of work is done!) • It has a finish • The application of the project life cycle to a particular project is called the Project Methodology

21. Section A: Directions in modern project management Estimating Accuracy across the Project Life Cycle NOT > +/- 50% 1.5x NOT > +/- 30% 1.3x Over-estimating 1.2x x = Actual cost / time 0.8 x 0.7 x Under-estimating • A key objective for all project managers and senior management is to increase the accuracy of estimates as early as possible in the project cycle • All estimates should reflect a level of confidence 0.5 x Project Definition or Business Case Project Initiation 0.25 x

22. Section A: Directions in modern project management Project Management – a new perspective • The profile of Project Management is being elevated within organizations as it is increasingly seen as fundamental to organization success • Emergence of Strategic Project Management • Emergence of the Project-based Organisation • Seen as delivering a partnership between administration, business, academic groups, technology & vendors • It’s being seen as a profession, with defined career paths and competency-based accreditation • The ‘dark science’ aspects are being replaced with practices based on performance & measurement “If the old middle managers are dinosaurs, a new class of managerial mammal is evolving to fill the niche they once ruled: project managers”

23. Section A: Directions in modern project management Project Management – 2 fundamental questions • There are 2 fundamental questions which need to be answered regarding organizational projects: • Are we running the right projects, with the right priorities for the right investment (people & $’s)? • and • As an organization, do we have the maturity and competency to run successful projects?

24. Section A: Directions in modern project management The answers lie in understanding the new model ‘New’ Model ‘Old’ Model • Projects deliver the Strategic, Academic & Business Plans • Projects grouped under Programs • All projects are, firstly, business projects • The ROI is well understood AND realizable • Project Management is competent • Senior management involved and committed • Strategic benefits were not targeted • Projects run in a stand-alone manner • Solutions were seen as technology solutions • The business case not fully understood • Management practice immature • Senior management were not involved enough

25. Topics Section B • Strategic Project Management • Portfolio & Program Management • Business-driven project management • The value for Princeton The value of program & project management

26. Section B: The value of program & project management The Project Portfolio Portfolio of Programs and Projects Program A Program X Project An Project A1 Project Xn Project X1 • The current approach is to group projects into programs, and define all of these in the organization's Project Portfolio • The aggregation of the projects into programs is known as the Project Portfolio • One way to view the Project Portfolio: it’s how we will deliver the Strategic Plan and component Academic, Research and Business Unit Plans

27. Section B: The value of program & project management Strategic Project Management Strategic Project Management is a set of processes which ties the Project Portfolio directly to the Strategic and Business Plans: • The Portfolio is the prioritized list of Programs and Projects • The Portfolio is built each year BUT the cycle is repeated each quarter • The continual evaluation of project performance and success against the Business Plans ensures goals & targets are being met • The process supports the rigorous monitoring of claimed benefits and ROI as the projects are being run – NOT after projects have finished

28. Section B: The value of program & project management Programs relate to the Strategic Plans Strategic Goal 1 Goal 3 Goal 2 Goal n Strategic Plan Programs relate Business Plans to the Strategic Plan Program B Program A Program B Program N Academic Strategic Plan X X Owner Research Strategic Plan Owner X X IT Strategic Plan X X X Owner Administration Strategic Plan Owner X X

29. Section B: The value of program & project management Programs & projects are functional in nature Portfolio Academic Units IT Finance Program A HR Benefits / Commitments Benefits / Commitments Project 1 Benefits / Commitments Benefits / Commitments Benefits / Commitments Project 2 Benefits / Commitments Benefits / Commitments Benefits / Commitments Benefits / Commitments Project 3 Benefits / Commitments Benefits / Commitments Benefits / Commitments

30. Section B: The value of program & project management Projects are grouped into Programs • Some reasons why structuring projects into programs makes sense. • Projects relate to same / similar business objectives. • They may share scope. • They often impact the same part of the business in the same time-frame. • They probably share resources. • They may well be dependent of the same technology.

31. Section B: The value of program & project management The value of program & project management • By relating programs to business & academic plans, their realization is controlled and more assured. • There is greater coordination across all the initiatives and projects running across the organization. (‘the right hand DOES know what the left hand is doing’) • There is more effective use of scarce and valuable resources. • Greater coordination leads to less waste, shorter time frames and lower costs. • Decision-making becomes clearer and more effective. • Your people achieve greater satisfaction and less frustration. • Project success is enhanced and benefits realized.

32. Topics Section C • 1. Key management roles • 2. Principal accountabilities • 3. Accountabilities across the Life Cycle: • Project Start-up • Project Execution • Project Completion The roles and responsibilities of senior management in project success

33. Section C: The roles & responsibilities of senior management in project success Key Management Roles The main Senior Management roles in Program & Project Management are: Role Description Comments Take ownership for the delivery of strategic goals Chairs the Program Board. Has overall accountability for ensuring the benefits of the Program are delivered Program Sponsor ‘Owns’ the project. Funds the project. Chairs the SC. Sets direction and maintains the vision. All projects need to be owned. Whoever has most to gain (& lose) is often the sponsor. Project Sponsor SC members are ‘key stakeholders’ and assist the Sponsor in decision-making and endorsing management deliverables. Key stakeholders are those who, by definition, will cause project failure if they withdraw support. Steering Committee Member

34. Section C: The roles & responsibilities of senior management in project success How important is the Project Sponsor? In influencing project success and benefits realization, there is probably no more important role than that of the Sponsor It is the Sponsor who sets the vision, defines the goals and objectives, approves and owns the scope and makes all the ‘big calls’.

35. Section C: The roles & responsibilities of senior management in project success Principal Accountabilities of the Sponsor • Commit adequate funding against a business case. • Ensure project accountabilities defined and agreed. Buy-in has occurred. • Ensure appropriate Project Governance is set up. • Priorities delivery options. • Ensure the right business / academic resources are allocated. • Approve Scope and changes to Scope. • Approve all project plans and budgets. • Ensure critical issues and conflicts are effectively resolved. • Ensure good management is carried out. Drive this practice ‘top-down’. • Make sure that projects are tracked using ‘hard data’ - the Performance Indicators. • Initiate Project Reviews to identify any major issues & improvements.

36. Section C: The roles & responsibilities of senior management in project success Accountabilities of the Sponsor at Project Start-up • 1. Make sure that scope is clearly and unambiguously defined. • 2. Ensure accountabilities (R&R) are defined and agreed. • Agree to Project Governance (including make-up of the Steering Committee). • Define the Business Case: a valid & realizable ROI. • Make sure the business has the capability and resources to run the project successfully – especially key personnel are available. • 5. Ensure the Project Plan (esp. cost and time estimates) are valid. • 6. Review the Risk Plan and contingencies.

37. Section C: The roles & responsibilities of senior management in project success Governance Models Project Governance Program Governance

38. Section C: The roles & responsibilities of senior management in project success Accountabilities of the Sponsor during Project Execution • Attend Steering Committee meetings! • Have a 1-on-1 with the Project Manager to review status and resolve issues. • Ensure changes to scope are kept to a minimum and are ALWAYS agreed to. • Ensure that resourcing commitments are being met. • Ensure budget, time frames and objectives will all be met; if not, then ensure corrective action is taken. • Monitor the claimed benefits to ensure they remain valid.

39. Section C: The roles & responsibilities of senior management in project success Accountabilities of the Sponsor at Project Completion • At the end of the project: • 1. Ensure Benefits Realization is carried out. • Sponsor a ‘Post Implementation Review’. • Oversee the hand-over from the project to the business / academic units. • Ensure improvements are made to management practice. • Share your experiences & knowledge with peers.

40. at the end of the day... Managing successful projects is an issue for the whole of Princeton. The ability for continued growth, meeting aggressive time frames and achieving academic, research & business objectives will all be boosted by the application of good project management practice. Princeton has the opportunity to further its reputation as being a truly excellent organization.