materials for the 4000 words paper
Mr.QProgramme and Project Strategy
Jayne Redfern
Programme and Project Strategy
Windfarms
Success or failure?
Programme and Project Strategy
2
Success or failure
In order of appearance
The Euro – enthusiastically embraced during the early days, today there is a fair bit of dissention; Italian politicians have suggested that they would be better off with the Lira, as has some German politicians with the Mark
Chip ‘n Pin – seems to be enthusiastically embraced by most, but what about pensioners? (Chris Hobson) In 1988 I took over as Inaugural Services Project Director for EftPos UK - a consortium of 13 banks and building societies developing the first nation-wide Point of Sale system for all shops in the UK. Part of our remit was to look at security of the system. We tried electronic signature, retinal scan, fingerprint - and settled on "Use of PIN". I had three prototype terminals built by different suppliers and put them on trial. They were a great success.
Then the marketing guys put their opinion in and said "The British public will never accept the use of PINs at point of sale - we must stay with signatures". The result? We scrapped the idea! (Would you call it a failure?) Now, some 16 plus years later the idea has once again been put forward and this time has been accepted!
Windfarms – embraced by many for the ‘clean’ energy they provide, but for many others there is some concern; the RSPB says they kill birds, and many aspects of the environmental lobby – destruction of the landscape, ‘eyesore, “thump, thump, thump, thump!” etc.
London Eye – initially, and even today “a blight on the skyline of London”; many others really enjoy the trip (JZ has done it twice – once on Guy Fawkes night – spectacular); Livingstone now campaigning for the continuance of the spectacle
Scottish Parliament – Initially supposed to be £43M – actual cost £435M when legislators in Scotland were already using the Church of Scotland debating chambers without any problems
Success or failure?
Scottish Parliament
Programme and Project Strategy
3
Success or failure
In order of appearance
The Euro – enthusiastically embraced during the early days, today there is a fair bit of dissention; Italian politicians have suggested that they would be better off with the Lira, as has some German politicians with the Mark
Chip ‘n Pin – seems to be enthusiastically embraced by most, but what about pensioners? (Chris Hobson) In 1988 I took over as Inaugural Services Project Director for EftPos UK - a consortium of 13 banks and building societies developing the first nation-wide Point of Sale system for all shops in the UK. Part of our remit was to look at security of the system. We tried electronic signature, retinal scan, fingerprint - and settled on "Use of PIN". I had three prototype terminals built by different suppliers and put them on trial. They were a great success.
Then the marketing guys put their opinion in and said "The British public will never accept the use of PINs at point of sale - we must stay with signatures". The result? We scrapped the idea! (Would you call it a failure?) Now, some 16 plus years later the idea has once again been put forward and this time has been accepted!
Windfarms – embraced by many for the ‘clean’ energy they provide, but for many others there is some concern; the RSPB says they kill birds, and many aspects of the environmental lobby – destruction of the landscape, ‘eyesore, “thump, thump, thump, thump!” etc.
London Eye – initially, and even today “a blight on the skyline of London”; many others really enjoy the trip (JZ has done it twice – once on Guy Fawkes night – spectacular); Livingstone now campaigning for the continuance of the spectacle
Scottish Parliament – Initially supposed to be £43M – actual cost £435M when legislators in Scotland were already using the Church of Scotland debating chambers without any problems
The module
To augment the PPMC and MMPE modules
Based on project strategy and governance
Some of the subjects to be covered:
Translating Programme strategy into Project strategy
Getting the requirements right
Perceptions of success (much more than mere T/C/Q)
Gaining and retaining stakeholder support
Reporting
Programme and project Rs & Rs (juxtaposing PM/Sponsor/PgM roles)
The rise of the PSO and its utility
Programme and Project Strategy
The module specification:
This module augments the existing Programme and Project Management, and Managing the Multi-Project Environment modules. It will be positioned to extend, and enhance student’s knowledge in the derivation, from corporate strategy, of business change programmes and their comprising projects, and then the chartering, structuring, and governance of those collections of projects. This will include exploration of stakeholders’ perceptions of benefits, their decision-making processes, their criteria for measuring success of these enterprises, and connection of all of these to the strategies for the management of the interlinked projects.
By the end of the module students should::
Know, comprehensively understand, and operate within the context in which programmes and projects are initiated,
Know, understand, and apply the principles and philosophies that underlie successful multi-project and programme management strategies
Have theoretical and practical knowledge and understanding of the multiple human, systemic, and operational factors that influence the initiation and governance of projects and programmes,
Have knowledge, understanding, and the ability to systematically apply the methodologies and tools used in multi-project and programme management strategising.
Programme and Project Strategy
Recommended further reading
‘Enterprise Programme Management’ – Williams and Parr
‘Program Management’ – Michel Thiry
‘Translating Corporate Strategy into Project Strategy’ – Morris & Jamieson
‘Competitive Advantage’ – Porter, M.
‘Exploring Corporate Strategy’ – Johnson and Scholes
‘Using the Balanced Scorecard as a strategic management system’ – Kaplan and Norton
Programme and Project Strategy
Programme and Project Strategy
Section 1: What is Strategy?
Programme and Project Strategy
Playing to win!
Programme and Project Strategy
Corporate ambitions
To be the market leader
To provide world-class service
To have the widest product range
To have the best products
To be the most profitable
To be the best-known
To have the major market share
To be the innovators
Programme and Project Strategy
How that translates:
Creation of a world-class manufacturing capability
Attract and retain the best product developers
Exploit the newest/best technology
Master our supply-chain
Be exemplary communicators
?. . . . . . . . .
All these are the basis for programmes and projects!
Programme and Project Strategy
Strategy
Strategic project planning is the synergy between a best practice culture of project management and the effective implementation of corporate strategy.
Project planning converts an organisation’s strategy into specific deliverables.
Programme and Project Strategy
12
These are 2 key definitions.
Strategy is the deliberate, systematic process of development and implementation.
Programmes and projects deliver change!
Programme and Project Strategy
The programme management environment
Strategies and initiatives
Programmes (and portfolios)
Projects
Business operations
Blueprint achieved (the vision)
Source: Managing Successful Programmes, 1999. Pub; Office of Government Commerce
Programme and Project Strategy
Deriving programmes and then Projects
Strategic vision
Mobilisation
Strategic Objectives
Strategic Options
Strategic Portfolio
Programmes
Pre-programme set-up
Programme set-up
Establish programme management & technical infrastructure
Deliver incremental benefits
Close the programme
Transition
Ongoing operations
Projects
Source: Project Management Institute, 2006
Programme and Project Strategy
Project Strategy vs. Project Management
Project Strategy – determining the right thing to do
Project Management – doing that thing right
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Project Strategy vs. tactics
Initiate
Plan
Do-it
Close
Project lifecycle
Emphasis
Strategy
Tactics
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17
MSG
1) Projects go through start finish, with clear stages.
Introduce generic project life-cycle (meta)
It is worth spending some time here discussing I P D C and the products that are part of each stage of the process. We don’t spend time anywhere else in MPW on the project lifecycle, so discussion of the activities and the resultant outputs / deliverables of each stage of the lifecycle will have lots of value.
2) Bring in strategy column (for focusing management attention)
3) Tactical
Throughout project the balance of strategy – tactics changes
At end in total control of tactics.
E.g. during Battle of Britain clip – knew loads of details about strategy,
exactly where everything was on the board etc. but couldn’t actually
fly the plane and do the shooting (not remote controlled airplane)
In the channel tunnel example, the control room very sophisticated, and
controlled tactical too, because the trains were virtually remote controlled
Programme and Project Strategy
Section 2: Converting Corporate Strategy into Programmes and Projects
Programme and Project Strategy
Strategic analysis
Generate
strategic
options
Evaluate
strategic
options
Select
strategy
Translate into
action through
planning
Project
selection
Project
management
plan
Organisational
view
Programme and Project Strategy
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Take them through the organisational view.
Factors
Internal
External
Competitive
Analysis of:
Management skills and capabilities
Required and available resources
Budgets and forecasts
Policies and procedures
Political
Economic
Social
Technical
Environmental
Legal
Industry characteristics
Corporate goals and objectives
Market share and product mix
Resources
Programme and Project Strategy
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KM: Projects must not be conceived in isolation.
Development of corporate strategy 1
Culture & stakeholder expectations
The environment
Resources & strategic capability
Strategic analysis
Strategic choice
Strategic implementation
Source: Johnson & Scholes, ‘Exploring Corporate Strategy’
Programme and Project Strategy
Development of corporate strategy 2
Strategic analysis
Strategic choice
Strategic implementation
Source: Johnson & Scholes, ‘Exploring Corporate Strategy’
Identifying strategic options
Evaluating options
Selecting strategy
Programme and Project Strategy
Development of corporate strategy 3
Strategic analysis
Strategic choice
Strategic implementation
Source: Johnson & Scholes, ‘Exploring Corporate Strategy’
Managing strategic changes
Organisational structure & design
Manning & allocating resources
Programme and Project Strategy
Development of corporate strategy 1
Political
Cultural
Planning
Natural selection
Logical incrementalism
Visionary
Source: Johnson & Scholes, ‘Exploring Corporate Strategy’
Programme and Project Strategy
Development of corporate strategy 2
Political
Cultural
Planning
Natural selection
Logical incrementalism
Visionary
Source: Johnson & Scholes, ‘Exploring Corporate Strategy’
Programme and Project Strategy
Development of corporate strategy 3
Political
Cultural
Planning
Natural selection
Logical incrementalism
Visionary
Source: Johnson & Scholes, ‘Exploring Corporate Strategy’
Programme and Project Strategy
Programme and Project Strategy
Section 3: Creation of the programme/project environment
Programme and Project Strategy
Context matters
Pace and scale of change
Relative focus of effort
Change capabilities
Core business capabilities
Source: Williams and Parr, ‘Enterprise Programme Management’
Programme and Project Strategy
The Puttick Grid
High
High
Low
Low
Product Complexity
Market Uncertainty
Programme and Project Strategy
The ‘Functional’ organisation
MD
Sales
Production
Support
HR & finance
PM
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32
Functional organisation:
Routine operations.
Specialist departments report to a general manager.
Some departments add no direct value to the operation but provide essential supporting functions (e.g. HR).
Each department carries out its tasks without the need for constant reference to the other departments.
Project manager occupies a staff position, reporting directly to a department head or to the general manager.
The project manager has no line authority, but schedules and co-ordinates project tasks across the departments in a holistic way and needs the co-operation of the line managers
The ‘Project’ organisation
Board
Project A
Project B
Project C
Core services
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Project organisation:
The construction industry is a good example
Place highly focussed project teams with clear goals and responsibility to the project manager.
Drawbacks: specific technical areas within team are small, possibly one person project is vulnerable to unavailability technical groups widespread, making it difficult to share experience and continually develop expertise.
The ‘Matrix’ organisation
Head of project management
Project
manager
Functional
manager
Functional
manager
Functional
manager
Functional team
Functional team
Functional team
Senior manager
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The Enterprise Programme Management framework
Source: Williams and Parr, ‘Enterprise Programme Management’
Strategic Management
Strategic portfolio management
Programme delivery management
Project management
Programme architecture
Change architecture
Programme Architecture: “The establishment of leadership, structures, team dynamics, and support mechanisms that enable the delivery of programmes and projects”
Change Architecture: “is concerned with the human considerations of those in the organisation who will be impacted by programmes and projects – beyond the delivery teams”
OUTPUTS
OUTCOMES
BENEFITS REALISATION
STRATEGIC INITIATIVES
Programme and Project Strategy
Programme architecture
Is the establishment of support structures and mechanisms that allow effective programme leadership, and provide the programme team with the environment, skills, tools, and support they need to operate effectively
Leadership and governance
Programme infrastructure
Team building and development
Programme resourcing
Communication infrastructure
Programme and Project Strategy
Communication infrastructure
How can the initiative be positioned within the organisation in a compelling way?
What are the key messages we need to get across?
Who needs to be communicated with and how
Programme and Project Strategy
Change architecture
Developing the change strategy
Planning the change journey
Embedding and reviewing
Emphasis
Time
…… is the process of crafting an overall change strategy and planning the interventions needed to drive the change
Programme and Project Strategy
The personal and corporate change journey
Unawareness
Positive perception
Negative perception
Try-out
Confusion
Understanding
Decision not to support
Adoption
Internalisation
Change bereft of support at initial utilisation
Change aborted after extensive utilisation
Programme and Project Strategy
First animation indicates the personal transition journey AS IT SHOULD BE
Second animation demonstrates the possible result if the change is mismanaged
Programme and Project Strategy
Section 4: Concepts of corporate benefit
Programme and Project Strategy
Concepts of ‘value’
Programmes and their projects are undertaken to pursue some vision of ‘advantage’
That ‘advantage’ or ‘Benefit’ may not be solely, or even partially financial
However, the bill must be paid, and the payer mostly wants some measure of ‘gain’, which usually comes down to financial metrics
Non-financial Benefits commonly support the ‘hard’ Benefits and may include significant ‘incidental’ Benefits
Programme and Project Strategy
Objective
Planning for success?
Programme and Project Strategy
Accumulating benefits from multiple projects
Source: Buttrick, 2006
Programme and Project Strategy
The ‘Business Case’
Choice under uncertainty
Balancing cost/risk/benefits
Comparing alternatives using a common measure
investment
growth
maturity
decline
0
Cost
Risk
Benefit
Programme and Project Strategy
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KM: The concept of cost/risk/benefits.
Slide builds.
Give example of 2 projects, one high revenue, high risk; the other lower revenue and lower risks. Which to choose? Depends on your viewpoint and situation.
Benefit risks – in the marketplace, will the product be accepted?
Cost risk – financing risks
The ideal product lifecycle?
$/£
MINUS
PLUS
TIME
Programme and Project Strategy
Business case contents
Description:
project outline
plan
constraints
Project success:
success criteria
deliverables
benefits
Justification:
financial appraisal
risk and opportunities
stakeholders and sponsorship
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47
Hot topic.
Slide builds. Add more detail to the slide:
Outline description – a clear and concise description of the concept and the overall project goals; optionally, a brief background statement to give context
Benefits – the tangible and intangible benefits that are expected to result from the project’s outputs; these may be refined during the planning stage
Primary deliverables (products) – list the key deliverables that the project will create
Constraints – define any known constraints e.g. time and budget: these will be validated during planning of the project
Success criteria – describe how the project’s success will be measured along with performance indicators
Outline plan – sufficient high-level planning to indicate that the project is achievable within the desired constraints
Risk / opportunity assessment – a preliminary view of potential risks and opportunities that may impact the project
Financial appraisal – an examination of the potential costs and benefits to provide the financial basis for the project
Stakeholders and sponsorship – a listing of key stakeholders and their interest in the project; a clear definition of who ‘owns’ the business case and will provide support to the project manager.
Benefits - impacts - deliverables
Projects
cause
trigger
achieve
produce
Deliverables
Impacts
Benefits
Vision
Programmes
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48
Start with Vision = outside, looking in cost of value proposition
Benefits statement comes from the vision e.g. we will increase profitability increase of 5% in this calendar year
Customer Value proposition (CVP) needs to be a value to the business – business benefit
Impacts must be sustainable
PPOS is there to ensure the total journey is accomplished and that performance is monitored.
The operating model must be able to absorb the impacts to ensure sustainability.
If the impacts cannot be absorbed by the operating model, you will never deliver the vision – can the operating model be changed?
The choice of impact will have a dramatic affect on the operating model
How are you going to track benefits if you don’t understand them?
Financial appraisal techniques
Payback
Net present value
Internal rate of return
And also:
Cash flow
Profitability
Rate of return
Many techniques are used in many combinations – we will explore some of them later
Programme and Project Strategy
49
Go though the definitions:
Payback -this method determines the time at which the money invested into a project is recouped from the tangible benefits
NPV – Is the total of all the cash flows, out and in, over the expected life of the project and its product and applying discount factors.
IRR – A theoretical inflation rate at which the DCF return on investment will be zero. E.g. if the IRR was 30%, then the inflation rate would have to rise to 30% for the investment to start making a loss. IRR is also called DCF Yield.
Cash flow – Is the difference at any time between investment and income/savings and can be shown on a graph month by month
Profitability – Is the sum of the expenditure and income over the time period
RoI – How much year-on-year financial return a given project will achieve
ROI = ( Annual profit / Initial investment ) x 100%
If this is close to bank base rate, then do not invest!
DCF – Takes into account devaluation of money (future inflation); DCF gives visibility to this risk by reducing future income and expenditure for the life of the project.
Discount factor year n is DFn = 1/(1+rate)n
Non-financial appraisal criteria
Stakeholder expectations
Strategic imperative
Competitive parity
Programme and Project Strategy
50
KM: Other factors to consider in justifying a project.
‘Enabler’ projects
‘Infrastructure’ projects
‘Compulsory’ projects – either to comply with regulations/legislation, or to maintain parity with competitors
Discuss the futility of so-called ‘pet projects’ which have no discernable benefits either tangible or intangible.
And some balancing factors
Where are the traps and pitfalls?
What, of relevance, is happening elsewhere in the world?
Programme and Project Strategy
Other considerations include:
Possible ‘Earthquakes’ – major Force Major events that could affect the whole of the sector/industry/country
The ‘World View’ – ‘Weltanshaung’ – how the host organisation sees its environment on the grand scale and interacts with it.
What the competitive scene looks like and what the competitors are doing – especially anything new developing on the scene
The organisation’s financial standing and its ability to fund the proposed development
Stakeholders strongly-held beliefs!
And some balancing factors
Where are you in the competitive race?
What are your stakeholder’s wishes?
Programme and Project Strategy
Other considerations include:
Possible ‘Earthquakes’ – major Force Major events that could affect the whole of the sector/industry/country
The ‘World View’ – ‘Weltanshaung’ – how the host organisation sees its environment on the grand scale and interacts with it.
What the competitive scene looks like and what the competitors are doing – especially anything new developing on the scene
The organisation’s financial standing and its ability to fund the proposed development
Stakeholders strongly-held beliefs!
Success?
Stakeholders – all of the people who are involved or affected by the project. The project must satisfy their needs
Products – intermediate (non-persistent), and final (persistent) deliverables
Project – time and cost constraints. The project must be completed on schedule and within budget.
Business – contribution to an overall improvement in business performance. The business must benefit, directly or indirectly, from the execution an/or implementation of the project
Source: Mussett, 1997
Programme and Project Strategy
Seeing the benefits
impact
T
C
Q
Internal
measures
Direct contribution
opportunity
Programme and Project Strategy
54
Ideally, Benefits are perceived as coming in three ‘waves’:
The immediate improvements that the organisation feels
The first financial payback that the organisation accrues
A well-formatted initiative will also provide foundations for further enhancement of the initial benefits
Meeting functional performance
Meeting technical specifications and standards
Favourable impact upon customer
Fulfils customers’ requirements
Solves the customer problem
Customer is using product
Customer expresses satisfaction
Success category: Immediate impact
Programme and Project Strategy
55
Business and/or commercial success
Revenue and profits enhanced
Larger market share generated
Success category: Direct contribution
Programme and Project Strategy
56
New opportunities
Competitive advantage
New markets
New technologies
Additional capabilities and competencies
Success category: Future opportunity
Programme and Project Strategy
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and another way of seeing it . . .
Strategic | Speculative |
Benefits which primarily support future business opportunities – business development, growth. | Benefits with a high achievement risk, but often high reward – e.g. arising from experimenting with the way we do things. |
Benefits which will deliver critical improvements to today’s operations – e.g. increased efficiency and effectiveness. | “Nice to have” benefits, in the sense that the organisation’s growth or survival will not depend on them. Usually related to improvements to non-critical activities. Often quick wins. |
Key operational | Support |
Source: Bradley 2010
Programme and Project Strategy
Cost avoidance
New income
Additional income
Strategic alignment
Competitive advantage
Competitive response
Asset preservation
Defining benefits – tangible and intangible
Programme and Project Strategy
59
Key message
Important to have some way of measuring them
Benefits can be financial or non-financial. Both are measurable.
And when no benefit, measure against impact KPI’s.
Risk avoidance is not really a benefit, you need to understand what risk it is you’re trying to avoid.
e.g. NU and Prudential. Both asked to do mandatory legislation (reporting of longevity of policies, this was a one-off), Prudential chose not to do and face the cost of the fine.
Project success criteria
End date October
Specs as agreed
I want our employees to be happy with the new processes
Budget £500,000
I don’t want anything to go wrong
I want it to involve as few of my people as possible
I want minimum disruption to BaU during implementation
Programme and Project Strategy
60
PCS – criteria by which the success of the project will be judged.
TCQ obviously important, but may have other criteria forced upon it.
Success factors must be objective – i.e. measurable. Easy for “99.997% reliability”, but how do you measure “Happy Staff”?
Project success criteria
Those decisive factors which if satisfied will make the undertaking acceptable to the client/user
Qualitative or quantitative measures - predefined hurdle level
Everyone focuses on different visions of success
Provided by the users and stakeholders (from elicitation)
KPIs - measures of success used throughout the project to ensure it is progressing towards a successful conclusion
Programme and Project Strategy
Programme and Project Strategy
Section 5: Financial appraisal techniques
Programme and Project Strategy
Financial appraisal techniques
Payback
Net present value
Internal rate of return
And also:
Cash flow
Profitability
Rate of return
Programme and Project Strategy
64
Go though the definitions:
Payback -this method determines the time at which the money invested into a project is recouped from the tangible benefits
NPV – Is the total of all the cash flows, out and in, over the expected life of the project and its product and applying discount factors.
IRR – A theoretical inflation rate at which the DCF return on investment will be zero. E.g. if the IRR was 30%, then the inflation rate would have to rise to 30% for the investment to start making a loss. IRR is also called DCF Yield.
Cash flow – Is the difference at any time between investment and income/savings and can be shown on a graph month by month
Profitability – Is the sum of the expenditure and income over the time period
RoI – How much year-on-year financial return a given project will achieve
ROI = ( Annual profit / Initial investment ) x 100%
If this is close to bank base rate, then do not invest!
DCF – Takes into account devaluation of money (future inflation); DCF gives visibility to this risk by reducing future income and expenditure for the life of the project.
Discount factor year n is DFn = 1/(1+rate)n
Payback
Z Ltd have a cost of capital of 12%. A new press costs £120,000. Income netted from costs from the new press are expected from year 1. At the end of year 4 the press will be scrapped with no significant residual value.
Year
0
1
2
3
4
Annual cash flow
£
-120,000
+40,000
+50,000
+60,000
+70,000
Cumulative income
£
-120,000
-80,000
-30,000
30,000
100,000
Payback in year 3
Programme and Project Strategy
65
Show that investment is in year 0 and payback in in year 3 on a flip:
0 1 2 3
£
Payback
£30,000
- £30,000
Payback 1st July
Jan
Jul
Dec
0
Year 3
Programme and Project Strategy
66
Net present value
Z Ltd have a cost of capital of 12%. A new press costs £120,000. Income netted from costs from the new press are expected from year 1. At the end of year 4 the press will be scrapped with no significant residual value.
Year
0
1
2
3
4
Annual cash flow
£
-120,000
+40,000
+50,000
+60,000
+70,000
DFs at 12%
1
0.893
0.797
0.712
0.636
Net present value
£
-120,000
+35,720
+39,850
+42,720
+44,520
+£42,810
NPV says DO IT
£
-120,000
+40,000
+50,000
+60,000
+70,000
+£100,000
Undiscounted
Programme and Project Strategy
67
Internal rate of return
Select discount factor higher than 12% to drive NPV negative – use 40%
Year
0
1
2
3
4
Annual cash flow
£
-120,000
+40,000
+50,000
+60,000
+70,000
DFs at 40%
1
0.714
0.510
0.364
0.260
Net present value
£
-120,000
+28,560
+25,500
+21,840
+18,200
-£25,900
Programme and Project Strategy
68
IRR – by graphical means
IRR
IRR
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69
Individual exercise (5 minutes)
Which gives a greater return?
Which gives a faster return?
Which gives a better return?
+60,000
+120,000
6
+60,000
+70,000
5
+60,000
+20,000
4
0
-30,000
3
-60,000
-80,000
2
-120,000
-130,000
1
-180,000
-180,000
0
Cumulative cash flow
£
Cumulative cash flow
£
Year
Compare these
2 projects
Project A
Project B
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70
Individual exercise. Note these are cumulative not yearly cash flows (no calculations necessary!)
A is greater return
B is faster
Do not know which is better! Need to know risks, financial situation (whether cash flow a factor)
Cash flow used for
Project tracking – tracking actual expenditure and income allows the period and cumulative cash flows to be calculated and compared to the planned cash flow
Funding level – planned cash flow will give an indication of the largest negative expenditure on the project and when this will occur
Overall profit and loss – final cumulative cash flow on a project can be viewed as the profit (loss)
Establishing terms of payment – the aim is to have the customer paying as much as possible as early as possible
Company cash flow – by totalling cash flow across all projects within a company, the total company cash flow can be calculated
Programme and Project Strategy
71
Could be a hot topic, such as ‘why is cash flow important’
Programme and Project Strategy
Section 6: Deriving the B-I-P routes
V2
Programme and Project Strategy
Programmes
It is the efficient execution of the set of projects within
a controlled environment such that they realise
maximum benefit for the resulting business
operations.’
[CCTA ‘Guide to Programme Management’]
‘Programme management provides the framework for
implementing business strategies and initiatives and
for managing multiple projects…
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74
KM: Programmes deliver benefits that could not have been achieved if the projects had been managed independently of each other (Ferns). Those benefits could be anything from reduced costs to reduced risks or better control and co-ordination.
It is the business strategy that determines the set of projects.
By grouping the projects within a programme the projects gain a collective direction and context.
Programme management appropriate when:
Strategic change is required with significant impact on the organisation
When outcome known, but methods to achieve them are complex and subject to PESTLE factors
Size and complexities of change cannot be managed as a single project
Mutually dependent interactions between projects and need to harmonise change
External factors will cause radical adjustments to a change initiative.
Programme types
Goal-focused Programmes:
Focusing on a Key Business-driven Requirement;
Usually very dissimilar Projects & Technologies;
A Core Aspect (with Benefit Mgt.) of the PPS Module.
Return-maximising Programmes:
Focusing on Key Business Capability Utilisation; (Capital, Facility & Management Capacity, Resources, & Supply Chain)
Usually very similar Projects & Technologies; (May include mutual Lead Technology & Post-delivery Support Projects)
A Core Aspect of the MMPE Module.
(
Programme and Project Strategy
75
1st phase
2nd phase
3rd phase
P
P
P
L
Current business
‘As-is’
P
L
P
L
P
P
Future business ‘blueprint’
‘To-be’
L
P
P
P
P
L
L
P
Island of benefit
Island of benefit
The nature of programmes
Programme and Project Strategy
76
Programmes are major undertakings and must be broken down into manageable chunks. At the end of each phase or tranche the programme brief is reviewed.
Why?
The PESTLE will change over the years (and typically, a programme will last years).
Now introduce the concept of types of programmes:
Business cycle
Super project
R&D
Top-down (driven by strategy)
Bottom-up (projects share a coherent framework)
New trains
project
Recruitment
& training
project
Awareness
project
Infrastructure
Upgrade
project
Deriving projects from programmes
Projects deliver outputs, Programmes deliver outcomes, outcomes realise benefits
New income
Benefits
Products
Additional income
New passengers
new services
More frequent passengers
More money from existing passengers
More ticket inspectors
Advertising campaign
Heightened awareness
Faster trains
Better signalling
More frequent trains
Better rails
Increased speed limit
New income
Additional income
New passengers
new services
More frequent passengers
More money from existing passengers
More ticket inspectors
Advertising campaign
Heightened awareness
Faster trains
Better signalling
More frequent trains
Better rails
Increased speed limit
Faster trains
Better signalling
More frequent trains
Better rails
Increased speed limit
Impacts
Projects
(Source: CITI Group)
Programme and Project Strategy
77
Derived from the programme to overhaul the railway system of the UK, this screen is multiple-build and is used to demonstrate the derivation of a programme structure form a desired ‘to be’ state and determination of the necessary deliverables, so that the projects to make those deliverables can be defined.
Programme lifecycle phases
Formulation phase – identify pressures to change (internal or external) and determine the best way to address them. Evaluate options.
Organisation phase – plan the programme organisational structure. Planning must focus on early benefits (to fund the rest of the programme), positive cash flow and maintenance of the motivation of the stakeholders.
Deployment phase –the programme manager acts as sponsor of projects, management of the environment and stakeholder expectations.
Appraisal phase – evaluate the programme during periods of stability and reassess the validity of the original business needs. Assess delivery of benefits at organisational and project level.
Programme and Project Strategy
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KM: Programmes have a lifecycle just as project do – but their phases are different.
Programme management is a learning and performance process.
Talk through slide which builds.
Inputs to Programme planning
Programme plan
Blueprint
Ability to achieve?
Vision statement
Clear understanding of target?
Transition
Cultural aspects?
Progress monitoring
Identifying milestones?
Benefits
Linked to projects?
Projects
Contribution towards Benefits
Resources
Capacity and skills
Timetable
Dependencies and interfaces?
Stakeholder needs
Appropriate information?
Risks and Assumptions
Responsibility for action?
Source: ‘Managing Successful Programmes’
Programme and Project Strategy
Differences
Project | Programme |
Fixed duration | Undetermined duration |
Predefined objective | Negotiated objectives |
Focused on tasks | Focused on goals |
Project manager as an overseer | Programme manager as a creative thinker |
Single deliverable | Multiple interrelated deliverables |
-
Programme and Project Strategy
80
Project management requires a performance process, using uncertainty-reduction techniques.
Programme management is both a learning and performance process, using a mix of ambiguity and uncertainty reduction techniques.
B-I-P mapping techniques
Step 1: What organisational capabilities/changes are needed to achieve the benefits sought?
Step 2: What projects do we need to deliver those?
Step 3: Review the proposed projects with the question “if we deliver all those but only those, is it likely that the benefits will be realised?” – what omissions are revealed!
Step 4: What programme risk management projects are required? (safety-nets and insurance!)
Programme and Project Strategy
WHAT projects do we need?
Programme and Project Strategy
A series of screens to provide for discussion about the necessity of ensuring completeness of the set of projects and their outputs (persistent products) to ensure propensity for full benefits realisation.
WHAT projects do we need?
Programme and Project Strategy
A series of screens to provide for discussion about the necessity of ensuring completeness of the set of projects and their outputs (persistent products) to ensure propensity for full benefits realisation.
Example B-I-P map
Source: Paul et al, 2010
Programme and Project Strategy
Programme and Project Strategy
Section 7: Getting the project Objective right
Programme and Project Strategy
Structuring the Project Strategy
“If you don’t know where you are going any road will do” – old Chinese proverb
Programme and Project Strategy
Structuring the Project Strategy
“Plan the flight
and fly the plan”
Programme and Project Strategy
Project types
Clarity of objective
Clarity of process
E.Obeng
Source: Eddie Obeng
Programme and Project Strategy
89
KM: Understand the type of project you are being asked to manage – and then set stakeholder expectations.
Slide builds:
Painting by numbers – evolutionary
Making movies - evolutionary (eg. software development company)
can become aimless and meandering
Quest - revolutionary (eg. increase revenue) overruns on time/cost
Walking in fog - revolutionary parallel investigation of options/solutions
Ask them for examples of projects that fit into these categories. PjM should aim at moving their project into the first quadrant.
Strategic Intent
An expression of the
VALUE of the project’s
OUTCOME to the
client/sponsor; what it
will allow them to do in
the way of creating
Benefit
Should be translatable
into an Objective
statement
Programme and Project Strategy
The project Objective
Strategic Intent
The project’s Mission
statement – how the
world will look after it
completes
A completion statement
– how we will know that
we have completed
Programme and Project Strategy
The project Objective
Strategic Intent
CSFs
An expression of HOW the SHs want the project to be performed, and how it will ‘feel’ in order for them to be satisfied
Should be tangible and therefore translatable into KPIs for utilisation in measurement towards their successful completion.
If not met, some or all of the SHs/clients will deem the project to partially or wholly unsatisfactory
Programme and Project Strategy
The project Objective
Strategic Intent
Constraints
CSFs
Restrictions on availability of resources of any kind – time, money, people (quantity, quality, types, level of skills, etc), that may well necessitate re-negotiation of the Objective.
Will be strongly influenced by CSFs and those may actually look like Cs.
Programme and Project Strategy
The project Objective
Strategic Intent
Constraints
CSFs
Products (Deliverables)
CSFs may necessitate some ‘non-persistent Products, such as SH Management Products or heavy-duty risk management products
The project’s set of Persistent Products (true Deliverables) will meet the Objective, and make the Strategic Intent realisable
As firstly or ideally visualised, they may not be possible due to Cs or CSFs
Up to this point we are involved in ‘strategic’ planning work
Programme and Project Strategy
First animation: to be able to determine the activities (WBS), we must first determine what needs to be created (PBS). Second animation: before we can create a network or schedule, we need to estimate effort levels and durations.
The project Objective
Strategic Intent
Constraints
CSFs
Products (Deliverables)
Once the PBS is stable, the WBS can be finalised, final estimates prepared, and a first schedule created i.e. the ‘tactical’ project planning work
Programme and Project Strategy
First animation: to be able to determine the activities (WBS), we must first determine what needs to be created (PBS). Second animation: before we can create a network or schedule, we need to estimate effort levels and durations.
The project charter
PRINCE2 – ‘Mandate’
APM – ‘Charter’
Others – ‘Terms-of-reference’,
‘Project Initiation Document’
‘Project Registry Document’
Programme and Project Strategy
The key project document
The Objective statement
The reason
The CSFs
The Product set
The Benefits
The Constraints
The strategic project risks
Ties together:
Programme and Project Strategy
Let’s look at one!
Programme and Project Strategy
Programme and Project Strategy
Project management plan
what?
agreement
acceptance
Where?
How?
Why?
Deliverables
Vision
How much?
Nature of change
When?
Tools and
techniques
Who?
Programme and Project Strategy
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KM: The final output of this process is the project management plan
The definition of any project is an iterative, top-down process. All too often the temptation is to jump in and get on with it without adequate planning.
The project planning process
Budget
Obtain key resource
Products
Processes
Resources
Risks
Schedule
Board agreement
Lodge with project office and baseline
Monitor assessment
Final review
PBS
WBS
OBS
Risk log
Detailed schedule
Dependency network
Estimating process
Source: Association for Project Management
Programme and Project Strategy
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The project management plan
Objective
SMART
Success criteria
requirements agreed
Requirements
Estimates
time/cost/resources
Budgets
Quality policy
Health and safety policy
Environmental policy
Risk management policy
Assumptions and constraints
Project organisation
Benefit realisation plan
Schedule
Plus
Technical
Commercial
Organisational
Personnel
Control
Programme and Project Strategy
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Hot topic
Blank projector and flip chart this - the delegates must know this for the exam … no need to memorise as it can be worked out logically.
In the reference text there is mention of our BPPRRS process.
Many believe a plan is a route (MSP) rather than a map. Draw comparison with auto-route step-by-step driving instructions and a map.
Both PBS and WBS are needed
The Objective
The PBS
The WBS
The OBS
What we are trying to ACHIEVE – the Outcome
What we need to CREATE - the Outputs
What we need to DO – the Activities
WHO we need to do what – the resource demand prediction
RISKS !
The ‘ideal’ planning route - ?
Programme and Project Strategy
This screen builds – we have not discussed the OBS previous to this, so will need to be explained now. Also discuss the way that risks are discovered at every stage of this analysis process (by those willing to discover them!)
An alternative perspective
The Objective
The PBS
The WBS
The OBS
The ‘resource-constrained’ planning route - ?
Programme and Project Strategy
There may be situations where limitations on the resources – either quantity or types – may constraint HOW (the build processes) and therefore the WHAT (ie. The Products) we can build. In this case, the planning model, pragmatically looks like this.
PRODUCT BREAKDOWN STRUCTURE
P 1.1
P1.2
P1.3
P3.2
Project output
P 0
P 1
P 2
P 3
P2.2
P2.1
P3.1
P3.3
P1.3.2
P1.3.3
P1.3.1
Programme and Project Strategy
Project strategy must start with the translation of the Objective into a set of Products that, when deployed, will fulfil the Objective and provide the propensity for realisation of the benefits being sought. Those Primary Products can then be disassembled or broken-down into their component parts. The product breakdown process provides valuable insight into the nature of the products, their composition, the type of processes necessary to create them, early indications of the resourcing needs, and the primary risks associated with their creation.
The PBS can also provide the basis for selection of appropriate ‘milestones’, and for measurement of project progress – EVA is based on the PBS approach that has come to be called Product Based Planning.
Project output
WORK BREAKDOWN STRUCTURE
P 0
P 1
P 2
P 3
P 1.1
P1.2
P1.3
P2.2
P2.1
P3.1
P3.2
P3.3
P1.3.2
P1.3.3
P1.3.1
W3.1.1
W3.1.2
W3.1.3
W3.2.1
W3.2.2
W1.3.3.1
W1.3.3.2
W3.2.2.1
W3.2.2.2
Programme and Project Strategy
When sufficient understanding of the product set has been achieved and the PBS has been developed to a sufficient depth to provide for its use later as a management tool, the activities associated with the creation of the entities that form the lowest levels can be analysed. That analysis will become the WBS. Note that a numbering system is essential to ensure clear identification of each and every entity in both the PBS and the WBS. The system shown in this screen enables us to relate all the activities to the products that they are contributing-to.
Project Strategy is as good as its outputs!
Creation of a viable project management plan is the essential output of project strategising
Programme and Project Strategy
Programme and Project Strategy
Section 8: Programme Risk Management
Programme and Project Strategy
WHY MANAGE RISKS ???
FIRE-FIGHTING’S ….. .
………..FUN !!!
Programme and Project Strategy
110
IT Scope Creep
Is 'Scope-Creep' a risk for IT projects?
No....... the best you can hope for is
1.5% per calendar month compound!
So... do you just give up?
No... Use Change Assessment, Timing & Control.
(including added activities for risk impact recovery actions)
Programme and Project Strategy
Budget £50m;
Actual cost £400m;
A lesson in a lack of Change-Control, & hence in ‘Scope-Creep’!
The Scottish Parliament Building
Programme and Project Strategy
Supplier: Chelton Telecom (SME)
Programme and Project Strategy
Client: EADS Astrium - Satellite Waveguides
Effect of deploying CBP Workflow Management System
Latest space craft model > 400 wave guides (W/G)
+50% improvement to first delivery
>80% complete at integration milestone 1
>+30% enhancement in non-recurring effort
4:1 ‘learning curve’ reduction
Cycle time reduction of > 20% than ‘best’ previous design
>20% price reduction (complexity = +20%)
Programme and Project Strategy
Benefit Delivery
Strategy
Benefit Delivery
Strategy
Strategy
Benefit Delivery
In delivering Programme output a business relies
on the contribution of other businesses ....
But each with their own business drivers:
Programme and Project Strategy
Benefit Delivery
Strategy
Benefit Delivery
In delivering Programme output a business relies
on the contribution of other businesses ....
But each with their own business drivers:
Benefit Delivery
Strategy
Strategy
BUT, WHAT HAPPENED WHEN ...
THEY IMPLIMENTED A
WORKFLOW SYSTEM ?
BUT, WHAT HAPPENED WHEN ...
THEY IMPLIMENTED A
WORKFLOW SYSTEM ?
Programme and Project Strategy
Benefit Delivery
Strategy
Benefit Delivery
In delivering Programme output a business relies
on the contribution of other businesses ....
But each with their own business drivers:
Benefit Delivery
Strategy
Strategy
Programme and Project Strategy
Benefit Delivery Management
Strategy
Strategy
Strategy
… inherently cutting wasted effort, risk, & delay from the Benefit Delivery
And the effect was:
The CBP Workflow System
put programme knowledge
and the whole delivery
process into the control of
the Delivery Management ...
Programme and Project Strategy
The Communication Dream
Treasury & Financial Mgt.
Human Resource Mgt
Operational & Production Mgt
The Programme Management Team
Programme Information Flow
The Business’s Strategic Management Ring
Commercial Management
Programme and Project Strategy
Reality!!!......................... (Twin-Ring Management)
Commercial Management
Treasury & Financial Mgt.
Human Resource Mgt
Operational & Production Mgt
The Programme Management Team
?
?
?
The Business’s Strategic Management Ring
‘Partisan Interests’ Ring
‘Person-to-Person’ communications based on personal business interests!
Programme Information Flow
Programme and Project Strategy
The VUCA -Vector
Diagram
‘Hard’ Demand Axis: A mixture of Volatility and Complexity (i.e. The Operating Environment)
Intersection Point of Risk management Demands
‘Soft’ Demand Axis: A mixture of Uncertainty and Ambiguity
(i.e. Knowledge & its communication)
( # VUCA was defined by US National Defense University, 1997)
#
Programme and Project Strategy
The VUCA -Vector
Diagram
‘Hard’ Demand Axis: A mixture of Volatility and Complexity (i.e. The Operating Environment)
Intersection Point of Risk management Demands
‘Soft’ Demand Axis: A mixture of Uncertainty and Ambiguity
(i.e. Knowledge & its communication)
( # VUCA was defined by US National Defense University, 1997)
#
* Noting that Competencies includes .....
......individual & group Integrity
And that Flexibility includes .....
the freedom to use the Competencies
Response Vector: A mixture of Competencies* and Flexibility* (i.e. Capability)
Programme and Project Strategy
1. Cost (or Time) Risk:
Affects the projects but can cause delays and increased costs to the programmes of which they are part;
Often the damage can be remedied, albeit at additional cost and incurred delays;
BUT can cause degradation of the performance and/or value of the project’s outputs, thereby causing business risk.
2. Benefits Risk:
Affects the business by impairing the programme’s outcomes;
Often the damage cannot be remedied or, if it can, the additional cost is high and incurs substantial delays (thereby incurring further risk);
Managed by a holistic approach to Risk Management across the programme and the enterprise.
MANAGED: MANAGED:
MOSTLY WITHIN THE PROJECTS BY BUSISNESS VIA PROGRAMMES
Two major Impact Areas .....
Programme and Project Strategy
Remember what is Important
Identified demands on the programme:
Quality Control
Cost Control
Skilled Resource
Scope Control
TIME (statutory)
TIME (statutory)
But the projects' stacks may be different!
Programme and Project Strategy
Understanding the Risk
The Risk
Register
Project 3
Volume IV
A Truly Strategic
Overview of Risk
?
& NOW AVAILABLE
WITH SCORED RISKS
!!!!!!!!!!!!!?!
Programme and Project Strategy
The 'Risk Book' Approach
The Project 'Risk Book'
Current Maximum Liability £££££
Probability Factored Value ££££
Current Financial Cover (Funding) ££££
Exceptional Risks £££ @ N%
Overview Report ... 'Noise', Correlations, etc
............. Plus Strategic Provisions
Or use a computer to generate
'Confidence Curves'
Programme and Project Strategy
Confidence Curves
Total Cost of Risk £ M
% Confidence
0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
100
80
60
40
20
0
Ideal
'S'
Curve
Look for
Exceptional Risks
Many Risks:
High Prob.
= Issues
Many Risks:
High Impact
Low Prob.
Programme and Project Strategy
‘Out-Turn Cost – Probability’ Plot
% Probability that Out-Turn Cost Exceeds Value
Projected Out-Turn Risk Cost £ M
100 80 60 40 20 0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
( # As used by the RiskAid & RiskAid Enterprise Software)
Programme and Project Strategy
The 'Risk Book' Approach
The Project 'Risk Book'
Current Maximum Liability £££££
Probability Factored Value ££££
Current Financial Cover (Funding) ££££
Exceptional Risks £££ @ N%
Overview Report ... 'Noise', Correlations, etc
............. Plus Strategic Provisions
Programme and Project Strategy
Plus Strategic Provisions
Financial Funding:
> Monies provided on an informed judgement;
Corporate Services:
> Insurance, Treasury, Legal, Procurement, R&D;
Competitors & Complimenters:
> Via Industry Associations & Joint Agreements.
Programme and Project Strategy
The Three Tests for 'Issue'
> Over say 65/70% Probability;
> Solution Determinable ...
... so no value to risk-taking;
> Risk Unacceptable ... ... e.g. Health & Safety threat;
... e.g. Cumulative Cost/Delay.
Programme and Project Strategy
When do you Escalate a Risk?
> Too big for the project/programme;
> There are wider implications;
> It needs a 'Systematised Solution';
...You need a Risk Escalation Policy!
Programme and Project Strategy
How do we go forward?
Make Assumptions!
And is making an Assumption a Risk?
You bet! but do not duplicate this data in a Risk Log
(prioritise documents ... Assumptions, Issues, Threat Risks, & Opportunity Risks)
Accepting ‘The World of VUCA’
Programme and Project Strategy
Three Phases in Delivery
Programme Negotiation
The environment that enables its Project
Enabling Projects
Activity to Deliver to the Programme
Capability/Benefit Exploitation
Processes to extract the value from the Programme
Increasing Vulnerability* to Risk
* i,e, Reducing Risk Appetite
Risk
Taking
Risk
Closing
Risk
Minimised
Programme and Project Strategy
The Deployment Phase of Delivery 1
Enabling Projects (of the Programme) Activity to Deliver to the Programme
Project Negotiation
Enabling Supplier Project
Supplier's Increasing Vulnerability to Risk
Capability/Benefit Delivery by Supplier
Different Programme Delivery Partners will probably be at different Phases at any one time
Programme and Project Strategy
The Deployment Phase of Delivery 2
Enabling Projects (of the Programme)
Activity to Deliver to the Programme
Reducing Level of Programme Risk
Risk Definition of a Programme:
An amalgam of dissimilar projects to enable a corporate benefit exploitation, organised as an entity such that each project delivers to the following process at a lower level of risk than it received from the proceeding process
Project 3
Project 5
Project 2
Project 1
Project 4
Delivery
Input
Input
Programme and Project Strategy
The 'Impact' Line (Irreversible Event)
The 'Incident' Line (Reversible 'Loss of Control')
Mitigation (Plus Recovery Planning & Preparations)
Stabilise for Recovery
Terminate or Prevent (Issues)
Monitor & Control
Return to Stability
Stable Owned, Robust & Governable Management (via Processes)
‘At Risk’ (i.e. Unstable, Bi-Pole Management)
Detect or Decide (Moving to 'M& C')
Moving to 'At Risk'
The 'Circle of Risk'
© Richard Watson, Technical Management Consultancy Limited 2012
Programme and Project Strategy
137
137
Stable Owned, Robust & Governable Management (via Processes)
‘At Risk’ (i.e. Unstable, Bi-Pole Management)
© Richard Watson, Technical Management Consultancy Limited 2012
Programme and Project Strategy
138
138
The 'Incident' Line (Reversible 'Loss of Control')
Stable Owned, Robust & Governable Management (via Processes)
‘At Risk’ (i.e. Unstable, Bi-Pole Management)
e.g. Slippage AND ?????
© Richard Watson, Technical Management Consultancy Limited 2012
Programme and Project Strategy
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139
The 'Incident' Line (Reversible 'Loss of Control')
Stable Owned, Robust & Governable Management (via Processes)
‘At Risk’ (i.e. Unstable, Bi-Pole Management)
© Richard Watson, Technical Management Consultancy Limited 2012
Static Management
‘Disaster’ Response Management
Instability-
Reduction
Management
Dynamic Observation & Management
Programme and Project Strategy
140
140
The 'Impact' Line (Irreversible Event)
The 'Incident' Line (Reversible 'Loss of Control')
Stable Owned, Robust & Governable Management (via Processes)
‘At Risk’ (i.e. Unstable, Bi-Pole Management)
Detect or Decide (Moving to 'M& C')
© Richard Watson, Technical Management Consultancy Limited 2012
Static Management
Dynamic Observation & Management
‘Disaster’ Response Management
Instability-
Reduction
Management
e.g. Slippage AND ?????
Programme and Project Strategy
141
141
The 'Impact' Line (Irreversible Event)
The 'Incident' Line (Reversible 'Loss of Control')
Stable Owned, Robust & Governable Management (via Processes)
‘At Risk’ (i.e. Unstable, Bi-Pole Management)
Detect or Decide (Moving to 'M& C')
© Richard Watson, Technical Management Consultancy Limited 2012
Static Management
Dynamic Observation & Management
‘Disaster’ Response Management
Instability-
Reduction
Management
e.g. Slippage AND ?????
Programme and Project Strategy
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142
The 'Impact' Line (Irreversible Event)
The 'Incident' Line (Reversible 'Loss of Control')
Mitigation (Plus Recovery Planning & Preparations)
Stabilise for Recovery
Terminate or Prevent (Issues)
Monitor & Control
Return to Stability
Stable Owned, Robust & Governable Management (via Processes)
‘At Risk’ (i.e. Unstable, Bi-Pole Management)
Detect or Decide (Moving to 'M& C')
Moving to 'At Risk'
The 'Circle of Risk'
© Richard Watson, Technical Management Consultancy Limited 2012
Programme and Project Strategy
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143
The 'Impact' Line (Irreversible Event)
The 'Incident' Line (Reversible 'Loss of Control')
Stable Owned, Robust & Governable Management (via Processes)
‘At Risk’ (i.e. Unstable, Bi-Pole Management)
Detect or Decide (Moving to 'M& C')
The 'Circle of Risk'
© Richard Watson, Technical Management Consultancy Limited 2012
REVERSIBLE INCIDENT The point where Control is lost
IRREVERSIBLE IMPACT
MAXIMISED
TIME GAP
Programme and Project Strategy
144
144
Analyse your Programme/Projects using 'Bow Ties':
Project or Programme
‘Incident’
Event
Evaluated
Consequence
Threat
Risk (Event @ Prob.)
Programme Risk Mgt. - ‘Bow Ties’
Programme and Project Strategy
Programme Risk Mgt. - ‘Bow Ties’
Analyse your Programme/Projects using 'Bow Ties':
Project or Programme
‘Incident’
Event
Threat
Evaluated
Consequence
Risk (Event @ Prob.)
Barriers to Consequences
And their Escalation
Barriers to 'Top Event'
Sequence:
Eradicate or Prevent
Decide
Monitor & Control
Immediately prior to the ‘Top Event‘ : Identifiers for ‘Control’ is Failing ... Plus ‘Control’ Recovery Plans
Barriers to Risk
Reducing:
Probability
Consequences?
Mitigations …. But …. DANGERS in TRANSFER
Threat to Barrier
Threats to Barriers
Threat to Barrier
And Barriers to those Threats
Note:
The reduction in
the Evaluation of Consequences & Probability (C x P) justifies the cost of the Barriers
Programme and Project Strategy
Programme Risk Mgt. - ‘Bow Ties’
Analyse your Programme/Projects using 'Bow Ties':
Project or Programme
‘Incident’
Event
Threat
Evaluated
Consequence
( incl. Cost Delay & Rectifications)
Risk (Event @ Prob.)
Threat to Barrier
Threat to Barrier
Evaluated
Consequence (incl. Cost Delay & Rectifications)
Threat
Evaluated
Consequence(incl. Cost Delay & Rectifications)
Risk (Event @ Prob.)
Barrier description
Escalation of Threat?
Threat to Barrier
Programme and Project Strategy
‘Rules of Risk Transfer’
Risk that is transferred transfers also the rights to manage that risk to the advantage of the new risk holder - and to be effective the transfer of both risk and the right to manage that risk must be fully understood by all the involved parties, and must be appropriately documented;
Risks may only be transferred for real benefit - e.g. in the of saving costs and/or resource usage, and also essentially in the improving of the project’s ‘Ability to be Managed’’ - and the risk may not be transferred solely for a either a reduction of threat or an escalation of opportunity to the transferring party;
Risk should be transferred to whichever party is most competent to manage that risk, and the transferring party has a responsibility to ensure that such transferred risks are within:
the technical competence of the risk recipient;
the managerial competence of the risk recipient;
and the financial competence of the risk recipient.
Programme and Project Strategy
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148
PEOPLE (Thinking & Risk Aware)
TOOLS
PROCESS
STRUCTURE
INFORMATION (Communication)
The Enablers of Risk Management
Programme and Project Strategy
Programme Risk Mgt. Tools
Getting your Ideas in Good Order;
Processing so as to Consistently Evaluate;
Formatting so as to Communicate ……. .
... Both the Problems and the Solutions!
To be used to meet your management needs of:
Programme and Project Strategy
Most organisations minimise their operational risks by designing their regular processes accordingly;
This means that most enterprise risk stems from:
An inadequate, misused, or faulty systems;
Excess, inter-reacting &/or amalgamated variances;
Unplanned/unexpected events (Human & System Complexity);
The concept of ERM involves an holistic, complete, pan-organisational adoption of Risk Management:
Enterprise Risk Management
Programme and Project Strategy
Some Recommended Reading
Some Recommended Reading
'Managing Risk for Projects and Programmes' by John Bartlett
'Picturing the Uncertain World' by Howard Wainer
'Harvard Business Review on Managing Uncertainty' in their 'Ideas with Impact' series
'Mastering Statistical Process Control' by Tim Stapenhurst
Google 'bowtie risk' and 'bow tie risk' for further information on the use of 'Bow Ties'
Programme and Project Strategy
Extending the use of Risk Mgt.
The end of the Risk Management Sessions.....
..... but not the end of your Risk Management:
> Selection of contract format with suppliers;
> As a tool in negotiation (+ look at their risk);
> Included in analysis for decision support.
Programme and Project Strategy
Programme and Project Strategy
Section 9: Product requirements elicitation and statementing
Programme and Project Strategy
Requirement or solution?
Requirement
I need to make the company
a financial success
I want a database
Solution
I want to be able to sell train tickets on-line
Requirement
I want a point-of-sale system
Solution
Requirement
Solution
Requirement?
One person’s solution is another’s requirement!
Programme and Project Strategy
156
Key message
Requirements has been moved to this lecture. Help the delegates understand that one person’s solution can be / is usually another person’s requirement
What is the right level for the problem to be defined at
If too low level – you may not be addressing the real problem
if too high level – it could be waste of money
(link to managing expectations)
As you go up the boxes on the slide (upwards), the uncertainty is increasing, therefore the level of complexity and uncertainty increases.
Specifying the problem isn’t easy
Solution focused
Ambiguity in language
Natural optimism
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Key message
Specify problem not solution
Language is ambiguous
Context matters to how you interpret
Pet projects, pet solutions
How big is the goal?
ACs
ACs
Constraints
S1
S2
S3
S6
S7
S4
S5
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Characteristics
Requirements
Define the problem
Non-negotiable
Changing a requirement changes
the problem being solved!
Acceptance criteria
Set by the problem owner
Are attributes of the solution
Negotiable!
Constraints
Typically owned by sponsor
Not primary attributes of the
solution
May be able to change
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Key message
Not all requirements are equal.
Recognise the difference between the above three. How a piece of information is intended to be used can have quite a dramatic effect on the project.
A good requirements statement will always allow multiple solutions.
Functional requirements
Climb-rate 2000 ft/min
6000 lbs thrust
Static breaking strain – 2T
Max operating speed 20 kph
Functional criteria are ‘binary’ – the product will either perform to them or won’t
Min range 500NM
Programme and Project Strategy
Are measurable quality attributes of a functional requirement
Help determine the users’ expectations
Non-functional requirements
I want
to make engineering development staff
effective
a project management course
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Key message
It’s the qualitative attributes – that point to what they really want
Need some way of getting explicit agreement on what they mean or want
Animation – the first sentence comes up first. Ask them if this is a requirement or solution
Then the rest of it comes up. It’s interesting, because there is a solution trapped inside the requirement
the real requirement would be to make customer service staff effective.
Any other concerns about this?
what does ‘effective’ mean.
It’s a ‘gikymarstible’ (from Lewis Carol). A nonsense word. What does it really mean.
Gikymarstibles are things like user-friendly, faster, flexible. (‘bends in middle’)
Link to managing expectations
WE DO NOT DO A NON-FUNCTIONAL EXERCISE!
Effective
Scale
Test
Driving out ambiguity
Attribute
Scale
Test
Accurate
%
Reduction in number of
Internally-originated
changes
Independent
Time
Weeks to solo
operation
Efficient
Count
Number of successful
Projects run
each year
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Its fairly easy to test for accuracy. Using a test populations of transactions, look at them to determine whether they have been done accurately. There may be some element of ‘watching over’ or observing actions rather than looking at documented results. Calculate the pecentage.
For independent operation you can test to see how long it takes for someone to quit asking questions. Or, tell them what the goal is to provide motivation, then see if they ask questions, and / or it has an affect on accuracy.
In terms of efficiency you can test to see how many an individual does in a morning, an afternoon or a day.
In terms of attributes, identify ones that can be tested. If you can’t create a test for the attribute, get rid of it. Once you have settled on a test for the attribute, you can almost throw the attribute away as the test and the metrics then become more important. The attribute is use is useful to determine what the test should / could be.
MOVE ON TO NEXT SLIDE
An acceptance test
+
Requirement
1.1.1
1.1.2
1.2.1
Met
3
3
Functional
Effective
Accurate
Independent
Efficient
Scale
%
Time
Count
Test
Reduction in number of internally-originated changes
Weeks to solo
operation
Number of successful projects run in each year
Worst
5%
26
7
Plan
10%
20
10
Best
15%
15
15
Now
40
5
Non-functional
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During the past several lectures we’ve been talking about functional and non-functional requirements. For functional requirements the criteria are fairly easily identified, for the non-functionals it is slightly more difficult. However, both are used to establish the acceptance test, and when both sets of acceptance criteria are met, then quality has been achieved. The requirements have been met.
Exercise
Imagine that you are the project team tasked with designing and developing a new ‘walkie-talkie’ radio
What might be some of the non-functional (qualitative) requirements ?
What metrics would you use to describe and define those NFs ?
AND HOW WOULD YOU TEST FOR THEM ?
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Programme and Project Strategy