The fourth project management constraint

Robert Graham, in an article titled ‘Beyond the Triple Constraints’ makes the case that project managers need to consider contribution to shareholder value as an additional variable. Anyone who has studied project management will be familiar with the triple constraints of time, quality and cost. Graham suggests that in the modern business environment focusing on these constraints alone is not enough.

He says that because project outcomes are increasingly vague (agile development methodologies and more fluid market place), costs are continually changing (caused by constantly changing outcomes) and schedules are more externally driven, an additional metric is needed.

A project manager who focuses exclusively on delivering a project in the quickest time to the highest quality and lowest cost may be doing a disservice to the organisation. Because the business environment is constantly changing, delivering on a plan that was agreed months or years before may not be the best outcome for the organisation now.

Suppose for example that a project manager was working on delivering a new product but during development some new technology emerged that made that project redundant. Continuing to work on that project would not be in the best interests of the organisation. Project managers need to consider more than just time, cost and quality. Graham suggests that an additional metric of shareholder value should be included. Increasing shareholder value is chosen of course because it should be the goal of any publically trading organisation (non-profit organisations aside). Project Managers need to constantly ask themselves, is my mix of projects maximising shareholder value given the way that the market is now; not the way it was a few months ago.

I agree with him that this should be the case but suggest that most project managers will be unable to ascertain which courses of action would best maximise shareholder value. Instead, project managers should focus on advancing strategic goals as communicated by senior management. It is the responsibility of senior management to communicate a small number of strategic goals that will lead to shareholder value maximisation, that all employees should be striving towards. This will result in a more coordinated, unified organisation and will avoid the danger where project managers take a course of action that increases shareholder value in the short term but damages its ability to do so in the long term.

Of course, for a project management office (PMO) to be able to take a real time look at its mix of projects requires a project and portfolio management tool. With such a tool, individuals within the organisation can take a holistic view of the PMO and ensure that it is constantly aligned with its strategic goals. If you would like to discuss how you can get that real time, holistic view of your PMO, please get in touch with us.

The Long-Tail of Idea Generation

TeamTrack is used by companies around the world in a myriad of different ways. In fact Serena knows of over 600 different applications that have been created using TeamTrack and they estimate that there are hundreds if not thousands more that they do not know about.
In this series of articles we will look in detail at some of the applications that Client Solutions has delivered to customers in Ireland using Serena TeamTrack.


The Idea Forum Application
An article entitled ‘Big Results from Small Ideas’ by Alan G. Robinson and Dean M. Schroeder looks at the impact of idea generation schemes in companies. They examined over 150 companies in 17 countries and surprisingly found, that the companies that did best were those that implemented lots of small ideas rather than a few big ones. They said,


“We compared the best idea systems in the world--those implementing 20, 50 and even 100 ideas per employee per year--with medium- and low-performing systems. The purpose was to document what works to promote idea generation, what doesn't, and why. One of the most surprising findings of the ‘Ideas Are Free’ study was how high-performing companies focused on small ideas while low-performing companies tended to go after big ones.”


What we are talking about here is the long-tail of idea generation. It is better to focus on lots of small ideas than a couple of big ones. The value of all those small ideas combined together far exceeds the value of a few big ones. In the graph below, we can see that the combined value of the ‘big’ (green) ideas is less than the combined value of the ‘small’ (blue) ideas.




The difficulty with any long tail however, is that the amount of effort expended in gathering and evaluating each idea in the long-tail can outweigh the benefit to be derived from implementing them. That is why you need to automate the process.


Client Solution’s Idea Forum application allows employees throughout an organisation to submit innovative ideas that are then peer reviewed. The top ideas each month or quarter are escalated to management who will consider them for implementation.


The main advantage of this application is that it captures valuable innovative and creative suggestions throughout the organisation. By exposing them to other employees for consideration, the organisation ensures that the best ideas bubble to the top and are improved upon by a forum type discussion. The result is that creative energy is generated by all the ideas and comments on ideas, bouncing off each other.


One good idea can be more than enough to pay for the application and by giving those who are closest to your products or services a voice; who knows what other innovative opportunities can be harvested.


How does it work?

1. An idea is submitted into TeamTrack through a website on the company intranet
2. The author of the idea may take a few days to fine tune the details of the idea and attach images and various bits of documentation to it
3. When the author is ready to have it peer reviewed, she clicks the ‘Send for Peer Review’ button.
4. Users who have ‘peer review’ privileges, can browse the list of ideas that are available for review. They can click into an idea, read the associated documentation, add their own comments and then give the idea a rating.
5. The ideas with the highest average rating or number of reviews bubble to the top.
6. A manager moves all ideas out of the peer review state every quarter and the top ideas are put before management for consideration. The authors of the top rated ideas are rewarded in some way, usually by giving them a percentage of the savings or profit resulting from the idea being implemented.


If you would like to discuss implementing the Idea Forum application in your organisation then please get in touch.


In future articles I will be looking at some other Client Solutions applications developed in TeamTrack that Irish companies are capitalising on.

Using Monte Carlo Simulation to derive more accurate project duration estimates

Monte Carlo Simulation is a relatively new technique in the field of mathematics that uses simulation rather than precise analytical calculations to arrive at an estimated value. In essence it introduces noise into a mathematical analysis. In the real world, actual outcomes seldom match predicted outcomes that are based on probabilities. ‘Noise’ or unanticipated influences often encroach on a situation, causing spurious results.

In this article I am going to look at how Monte Carlo Simulation could be used to give more accurate project duration estimates.

No project runs entirely uninterrupted from start to finish. Team members become ill or other higher priority tasks arise and require immediate attention. This is the ‘noise’ that I am referring to. ‘Noise’ is basically all the things that interfere with the normal running of a project. By looking back at the accuracy of a team’s estimates in the past and injecting random noise, the hope is that a more accurate estimate can be attained.

Forecasting how long a project is going to take has been a near impossible task for companies for years. Few large infrastructure projects where there is a team and strict deadlines in place, are completed on time.

Hugh W. Ryan, in an article for Outlook Journal, summarized research that showed:

- Only 8 percent of applications projects costing between $6 million and $10 million succeed.
- Among all IT development projects, only 16% are delivered to acceptable cost, time and quality.
- Cost overruns for IT projects have been estimated at $59 billion in the United States alone.

According to the Economist, a £456m ($844m) project for Britain's Child Support Agency came in over a year late, and has failed to deliver payments to more than half of eligible applicants and according to Cuppan approximately 80% of the medium to large software projects executed within the Department of Defense (DoD) were 100% over budget and 90% were at least one year behind schedule.

As the main cost in software development is developers, time over-runs quickly translate into cost over-runs. The accurate calculation of how long a project is going to take is vital to the success of a project. With a team of 20 developers, for example, that is costing €30,000 to €40,000 per week, delays soon add up.

In looking for an example of a large project that has run way over original estimation, consider the repeated delays of Microsoft’s Vista operating system. Vista was intended to replace Windows XP as Microsoft’s main operating system. While it is ambitious in terms of what it hoped to achieve (new file system structures and interface standards), it has become something of a joke in the industry. Every few months, Microsoft came out with a new vague release date intention which was ultimately not met.

When asked about Vista during an interview in Sept 2003, Microsoft Group Vice President Jim Allchin was similarly vague. "It's all a question of probabilities," he said. "[2005 is] our target. But there's a probability it may make it, it may not ... The truth is, these are targets ... We'll know so much more when we hit Beta 1. And we're not going to be at Beta 1 at the PDC [Professional Developers Conference in late October]. Once we hit Beta 1, we'll be able to get customer feedback. You can't predict when a product is going to ship until you get some customer feedback."

Almost two years later, there was still no release date for the new operating system. What are the difficulties in estimating a release date for software?

Difficulties with Software Project Duration Estimation

1. One of the main problems associated with estimating software project duration is defining what is included in the product offering and what is excluded. As specifications are fleshed out and then agreed upon, there is a tendency for management to add to, or change requirements as customer feedback is received. This can clearly be seen from Jim Allchin’s comments in the quote above where he observes that customer feedback will alter the proposed schedule.

2. Boehm and Fairley mention the lack of clarity when defining what work is included in a software project’s definition. They say

‘Does an estimate of 100 person-months for “software development” include analysis and design, integration and test, deployment, management, or uncompensated overtime? If you use the estimate without knowing the answers [to these questions], you can get yourself into serious trouble’

Projects are often embarked upon without a clear understanding of exactly what any declared deadlines relate to.

3. Design documents are often not detailed enough, so that when it comes to the build phase of the project, there are too many unknowns still in existence. Tasks that were assumed to be straightforward turn out to be more complex and so take much longer to develop than was anticipated. In fact Armour describes the software developer’s role as

4. The level of maturity of the software development process in an organisation or team is another large factor. The more experience a team has in developing software, the more efficient it will become.

5. Another difficulty is the fact that most developers, when asked how long a task will take, tend to use very inaccurate ‘guestimations’. Developers are notoriously bad at estimating how long a task will take. There is a problem as Armour notes,

‘large commitments of lots of money are made by big companies based on hunches and guesses by junior programmers.’

6. Kolmogorov complexity, a well-established and accepted area of information theory and computer science, describes the inherent complexity of software. In effect it claims that there is no algorithm for finding the shortest program with a desired behaviour – or there is no best way of doing a project. When we accept that there is no best way of writing a piece of software, we realise that project length estimation cannot be done with 100% accuracy.

7. An application of the second law of thermodynamics is also relevant here. As there are far more things that will slow down a project than will speed it up, we almost always underestimate.
When one considers all these reasons why software project estimation is problematic the question must be asked, are there any techniques for maximising the accuracy of estimates. It is not good enough to dismiss it as an impossible task. Companies that invest in software development insist upon some sort of estimate so as to be able to plan budgets and schedules.

Current Techniques for estimating project length

The following are some techniques that are used by industry to improve estimates.

1. Guess

"Software is a manufacturing process and manufacturing isn't a guessing game. There is too much at stake," (Boz Elloy, senior vice president of software products at Borland Software). This is obviously the most inaccurate method of estimation. It uses the expectation that a developer or team of developers will have a good ‘feeling’ for the size and expected duration of a project based on their experience in past projects. One of the obvious difficulties is the amount of unknowns. Armour in his article ‘Ten Unmyths of Project Estimation’, stresses that a developer’s primary job is not to write code but to gain knowledge. He suggests that because ‘much of software development involves acquiring knowledge we do not already have, we can neither accurately estimate how long it will take us or even if we have got it all.’

A way of simplifying this guess is to break the work into smaller more manageable pieces and estimate how long each piece will take. This technique called modelling assumes however a good understanding of what the various elements of a project are. This is not always the case.

2. Improved Guessing – Modelling

Karl Wiegers once said, ‘If a picture is worth a thousand words, a model is worth 1024 lines of code’ (ouch!) Modelling is a very widely used technique that development teams use to get a better understanding of the various elements of a project and as a result can better estimate the amount of time needed to complete it. There are various techniques that are available for modelling including the Unified Modelling Language (UML). This is a standard that allows developers to describe the way parts of a program flow into each other and are connected. Although it does not focus primarily on the length of time each element will take to develop, it is the most popular model and gives a very good understanding of the overall product. Once these elements are identified, they can each be further broken down until the number of unknowns is reduced to a manageable size and better estimates can be made. According to Davis
‘A model simply provides us with a richer, higher level, and more semantically precise set of constructs than the underlying natural language. Using such a model reduces ambiguity, makes it easier to check for incompleteness and may at times improve understandibility.’

3. Improved Guessing – Benchmarking

This approach involves looking backwards in order to look forwards. When a team embarks on the process of estimating how long each element in a project will take, they will make many mistakes. Benchmarking involves looking back at how a software team has performed relative to its estimates in the past. This is the most accurate method mentioned thus far.

Software developers record what their estimates are prior to embarking on the project or task and then record the actual time it took. This has two main benefits. First it teaches developers how to estimate. Estimating is a skill that needs to be developed. By sitting down with a developer and reviewing his or her estimates, their accuracy can be increased over time.

The second benefit in recording estimates and actuals is that the success rate can be used in the future against future estimates. Furthermore, if a manager knows how long a certain task took in the past then a similar task should take a similar amount of time in the future. If a developer tends to be overly optimistic in his estimates by a factor of X then it is likely that he will do so again in the future. By recording the developer’s performance and success rate, future estimates can be more accurate.

A word of warning however. As each project is different, the length of time to perform the tasks in it will be different. Our ability to acquire knowledge we do not have however, tends to be similar, no matter what that knowledge might be.

Monte Carlo Simulation

Monte Carlo Simulation is a relatively new technique in the field of mathematics that uses simulation rather than precise analytical calculations to arrive at an estimated value. In essence it introduces noise into a mathematical analysis. In the real world, actual outcomes seldom match predicted outcomes that are based on probabilities. ‘Noise’ or unanticipated influences often encroach on a situation, causing spurious results.

Software development is a process where, as we have seen above, there are many factors that can influence the amount of time a project will take. As each project is different in terms of goals, environment and personnel (customers and team) the amount of ‘noise’ exerted on a project schedule is phenomenal.

The following is an application of Monte Carlo Simulation that may be used to allow the project manager better calculate a delivery date for a project. This is my own proposal that I believe is better for calculating an estimate as it factors in the fact that there are so many unknowns in software development. The steps are as follows: -

1. Get your team to estimate how long a task will take and then record the actual amount of time that task took. This gives us a series of estimates vs. actual for each team member.

2. Determine how far out each estimate is and express it as a percentage. For example, if an estimate was for 20 days and the actual was 30 days, then record that the estimate was 50% out.


3. Determine the frequency that each deviation occurred and calculate the probability that that deviation will occur again. Also work out a value between 0 and 99 that corresponds to that deviation. This value will be used later on.


4. For the next project that we are about to embark on, get Peter to estimate how long each task will take.

5. In this step we are going to inject some noise into Peter’s estimates. Noise by its nature is random so we get a series of random numbers from a random number generator.

6. We take each random number in turn and compare it with a value in the 4th column of step 3. This will give us an expected deviation and from that we can calculate the time differential.

For example, we take the first random number 39. By looking at the table in step 3 we see that 39 corresponds to a deviation of 21% -> 40%. We take Peter’s estimate of 9 days and combine it with the deviation and estimate that if this level of noise occurred, we would expect Peter to finish the task between 10.89 days and 12.6 days.

9 + (21% of 9 days) = 10.89 days
9 + (40% of 9 days) = 12.6 days

For each task we will add three different levels of noise and see what the best and worst case for Peter doing the task are.

We work out therefore that for Peter’s estimate of 9 days and given the level of accuracy he has shown in the past in his estimates, we should expect him to finish the task between 9.99 and 12.6 days. If we calculate out his other estimates we find the following

For the entire project we come up with the following estimates


Conclusion

While this method isn’t perfect, it moves beyond guessing and benchmarking to account of the noise that enters into all projects. Of course all the calculations and tables can be automated out so that its complexity is hidden from the user. I believe that it will give more accurate estimates however that organisations can use to improve their project estimations.

Random deviations will occur with the same frequency that they occurred in the past.

Enhance your TeamTrack Interface

In this tutorial I want to show you how you can use HTML to add pictures to your TeamTrack solutions in order to make them more interactive and colourful. A picture that uses shadowing can also add depth to your solution making it richer and more appealing.

The technique basically is made up of the following steps.

1. Make the graphic that you want to add and save it as a jpg file [e.g. ExplainImage.jpg] in the main images folder which is usually [C:\Program Files\Serena\TeamTrack\bin\images] on the server computer.
2. Add a new text field to the workflow called lblExplanationHTML. Set the type to 'Memo' and check the ‘Spans entire row on form’ checkbox. ‘Render HTML tags’ should also be checked
3. Check the ‘Access Overrideable Attributes’ box to make the ‘Default Value’ box editable and make it read only.
4. In the ‘Default Value’ box type the following
   
   

   <img src = "../tmtrack/images/ExplainImage.jpg">

5. Click the 'OK' button to save the new field
6. Edit the field again and replace the logical field name 'lblExplanationHTML' with a colon :If you add that field to any transition or state it will be visible as in the screen shot below

In a future article I'll show you how you can build complex colourful tables using HTML and scripting.

The science behind PPM

If you think about it, projects and investment funds have a lot in common. Both involve an initial outlay of costs but the hope is that they will bring a financial gain to the investor in the future. Given the constraints of finite resources, the investor will need to be clever about his choices. Selecting one project or investment fund will naturally exclude the selection of others. The selections cannot be based on a whim and must be approached in a dispassionate manner that allows each option to be quantified and mathematically compared.

Dr. Harry Markowitz won the Nobel Prize for economics in 1990 for his work on the Efficient Frontier theory. This theory looks at selecting a portfolio of investments so as to maximise the return to an organisation. Project and Portfolio Management (PPM) has its roots in investment fund portfolio management. As with financial investments, the idea is to get the maximum return for the mix of projects that a company can choose from.

This includes both selecting the right projects and periodically reviewing the selection to ensure that the mix continues to be the best possible for the organisation. This optimisation ensures that we neither overspend on IT nor miss revenue generating or cost saving opportunities for further investment.

The Efficient Frontier
The Efficient Frontier helps organisations understand the tradeoffs between portfolio value and cost. It effectively identifies the set of all portfolios that will give the highest expected return for each given level of risk. The organisation can then make a decision about the level of risk that it wants to adopt.

Obviously, to be able to compare portfolios in this way requires that information about projects and project execution be entered into a software application. Mariner is one such application that companies such as Starbucks and Yahoo have used to build successful business models.

Modelling as the future

This interesting blog article by Jeremy Burton looks at the focus Microsoft is putting on Modelling as the ‘Holy Grail’ of programming. The idea is that programmers will be able to develop applications in the future simply and quickly by linking together services using a graphical tool.

The developer essentially draws a picture of a process (model). When she is happy with that process she can turn it on and it becomes available to the entire organisation. The new process is automatically enforced which frees up employees from focusing on operational issues and instead allows them to spend their time pursuing strategic goals. This is already possible with Serena TeamTrack which organisations all over the world have been using for years to manage their businesses.

The next generation of modelling that Jeremy speaks of is the ability to have non technical people draw these pictures and be able to expand their process pictures to tie in with other applications in the organisation or websites that are outside it. These websites can include SalesForce, Google Earth, QuickBooks online, or any other website that exposes a web service.

While Microsoft talk about this Modelling as an aspiration, Serena is about to release a product that will accomplish it.

Business Mashups are coming early next year.

Augmenting your SharePoint system with TeamTrack

Many organisations have a Microsoft SharePoint system in place which they use primarily as a document library. Often it can grow to become a monster that is full of redundant documents and is impossible to navigate and maintain. TeamTrack, a business process management tool, can be used with SharePoint to enforce a more controlled solution.

To understand how this can be done consider the following core strengths of both SharePoint and TeamTrack.

SharePoint
SharePoint is mostly used as a browser-based document management system. Individuals within the organisation create site collections, sites and personal sites in which libraries can be hosted. SharePoint can tightly integrate with Microsoft Office (2003 and later versions only) so that documents can be added to SharePoint libraries directly from within the Microsoft Office application itself.

Users can also ‘check out’ a document from within the Microsoft Office application itself which effectively locks it down so that other users cannot edit it until it is ‘checked in’ again.
Some basic process management can also be implemented in SharePoint such as a predefined approval process though it is limited and difficult to change.

TeamTrack
TeamTrack is a full business process management tool that enables an organisation to quickly define and automate its own internal processes. It can enforce agreed standards so that control is put on the routing and authorisation of items such as documents or issues. Versioning can also be enforced and any changes to the process can be rapidly implemented.

Processes that have been enforced can be viewed graphically so that users can easily see what the document has gone through in order to be in its current state and where it will be routed next.

Combining SharePoint and TeamTrack
A solution that combines both SharePoint and TeamTrack would be the ideal as it would effectively wrap the SharePoint library with the control provided by TeamTrack as shown in the graphic below.

TeamTrack Process Wrapping your SharePoint Libraries

Taking advantage of TeamTrack’s open APIs; integrations to established third party change management tools can be easily implemented. This level of version control is not present in SharePoint alone and is important from an auditing perspective.

Rather than forcing your employees to provide required documents as a method of controlling how they work, this solution will allow your existing processes to drive the business and where documents are required along the way they can be attached. This is a subtle difference but it results in a solution that is more in tune with how you do business. Any collaborative business process can be represented in TeamTrack quickly and easily. Where you rely on SharePoint alone to manage your documentation you can miss out on this.

Finally it is worth pointing out that this combined solution will also be Mashup-Ready as the next version of TeamTrack (due out in the next couple of months) will allow quick integration with any Web 2.0 application that exposes web services such as SalesForce, PeopleSoft or Google Maps. More about that in other blog articles.

Conclusion
Integrating SharePoint and TeamTrack provides a stable, extensible, enterprise-wide solution. It will allow you to easily manage your documentation ensuring any approval or change processes are well managed and audited. If you would like to discuss augmenting your SharePoint system with TeamTrack please do not hesitate to get in touch with us.

Business Process Lego

Most of us will remember building things with Lego as a child. Lego, the company, sold bricks of various sizes and shapes and left it up to the imagination of children to use them to build whatever they wanted. The results were often very complex models that the Lego designers had never even considered would be built when they sold the bricks.

Over the years, Lego has brought out new components. These components can fit into a Lego model because they comply with the standard interlocking brick bumps, but each component offers additional functionality of its own. These components have included doors, trees and drawbridges and even more recently components that are programmable by a computer. By making these advanced components available along with the original standard Lego bricks, much more complex models can be created and innovation is fostered.

Here’s where we get a bit abstract. Imagine if in business, companies provided components that complied with a common standard so that they could be linked together and built into an overall solution. SalesForce.com, for example, might provide a component that gives you an employee’s details if you gave it the employee number. Google might provide a component that gives you a map if you gave it an address. Quickbooks might give you an account balance if you gave it an account number. If you wanted to create an application that updates an employee’s details, you might put these components together and very quickly you would have a working Internet based application.

A solution built with business process Lego

Some companies already provide these components in a format called a WebService. (Click here for an example of Dunn and Bradstreet’s credit rating check WebServices.)

Serena is about to launch a new product called Mashup Composer which will allow you to effectively use business process Lego to create exciting new applications much more quickly than if you developed them from scratch. This can empower those who are not software developers to be innovative and build simple web applications of their own. Now no one is suggesting that they will build the next national healthcare management system, but they can build simple web applications for getting things approved, recording complaints, or managing leave requests for example.

I will be discussing these exciting developments in the world of business mashups in the coming months in this blog.

Getting the most out of your TeamTrack System

Serena estimates that there are hundreds, if not thousands, of TeamTrack applications in existence. This means that although you may have installed TeamTrack in your organisation to manage a particular process, chances are, you could be getting more value out of it.
In this brief article I want to give you some examples of ways that organisations are using TeamTrack.

1. NDA approval
In the US, over 4,000 employees at Lockheed Martin use TeamTrack to manage a number of processes including their Non Disclosure Agreements (NDAs). Details of each NDA are entered into TeamTrack and can be tracked as they are approved. Through powerful reports, users can quickly see what NDAs are in place and what their statuses are.

2. Leave Requests
In this workflow, an employee submits a request for leave. The system routes it to the employee’s supervisor who will receive an email with the request details. The supervisor can approve or reject the request and this response is sent back to the employee. If the leave request is approved, the number of days requested is subtracted from the employee’s entitlement. Reports can show all outstanding holidays for employees.

3. Project Governance
While Serena Mariner can be considered the tool of choice for managing a portfolio of projects, some organisations do not want that level of control. For simply guiding a project through a series of authorisation gates and phases, TeamTrack can be the perfect tool.
TeamTrack can be configured to require that certain documents are attached at specific phases of the project and that sign-off is obtained from management at various points along the project lifecycle.

4. Expenses Approval
Many large organisations use TeamTrack to manage their expenses approval process. Employees can enter their expenses directly into TeamTrack or attach their expense forms as spreadsheets or documents. They are then routed to appropriate supervisors who can reject or approve them. If they are rejected, they will be sent back to the employee with a note and if they are approved they will be automatically sent on to the finance department to be dealt with. This simple process can really speed up expenses approval and reports can show how expense claims are distributed across your organisation.

5. Managing Customer Enhancement Requests
Over 3,000 employees at Thomson Financial use TeamTrack to streamline various processes including the routing of enhancement requests. Using the process that they implemented, when a customer logs a suggestion or request with a customer service agent, it is routed based on its importance, to the product manager or development manager for consideration.

Thomson Financial has also overhauled its sales proposal process with TeamTrack. “It used to take about five days to pull together a sales proposal. Now it takes three minutes,” says Hastings-Kimball. “Our sales teams now spend more time with their customers and prospects to increase revenue.”

I hope this short article has stirred your creative juices and you can start seeing new ways that TeamTrack can be used in your organisation. If you would like to get in touch with us to discuss those new ideas, please do not hesitate to do so.

Reducing Project Failure

Most organisations have war stories of projects that were never completed or failed to deliver on what they promised. It is far too common an occurrence. A report from The Standish Group in 2004 entitled “CHAOS Chronicles”, which studied over 40,000 projects, showed that project success rates had more than doubled to 34% from their previous study a decade earlier! 34% is still a success rate that most organisations would consider to be unacceptable.

Project and Portfolio Management (PPM) has been generating a lot of hype recently because it addresses this high failure rate. It looks not just at how individual projects are being managed but at how those projects fit in the wider context of the organisation’s strategic goals. PPM asks the question, “Are the projects being pursued the ones that should be done in the first place?”

Forrester Benchmarks
When considering if PPM is right for your organisation, consider the following key benchmarks on PPM success from Forrester, the independent technology and market research company.

· Visibility of the total project portfolio
Elimination of redundant, underperforming, low-value and poorly aligned projects
Benchmark #1: Reduced Project Cost: 1% - 5%, Forrester, 9/05

· Better utilization of resources
Efficient allocation, reduced bottlenecks and balanced workloads
Benchmark #2: Reduced Resource FTEs: 1% - 5%, Forrester, 9/05

· Improved project success
More projects delivered on-time and within budget
Benchmark #3: Improved Project Success Rate: 15% - 30%, Forrester, 9/05

· Improved operational efficiency
Reduction in manual effort required for PPM processes.
Benchmark #4: Reduction in manual effort 20 - 30%, Forrester 9/05

· Better investment decisions
Minimize the full lifecycle costs while maximizing benefits of technology investments.
Benchmark #5: Savings in total IT costs of 5% - 8%, Forrester 9/05

· Alignment of the application portfolio
Consolidate the application portfolio, replace high cost applications, and enforce standards.
Benchmark #6: Savings in application maintenance cost: 10 – 20%, Forrester 9/05

If you would like to discuss how Mariner from Serena can help your organisation achieve these kinds of results, please contact us.

Business Process Modelling third in top 10 technologies for 2008 (Gartner)

According to Gartner, Business Process Modelling is one of the top technologies to focus on in 2008. While BPM is not technically a ‘technology’ (it is more a field of knowledge), it must be in place before really useful SOA (Service Oriented Architecture) applications can be developed.

This supports comments in an earlier blog article where I suggested that more formal automation of business processes must occur in organisations to accommodate recent changes in the general business environment. In that article I argued that organisations cannot enforce their processes without some process automation tool like Serena’s TeamTrack.

Gartner’s full top-ten list can be found here.

Your Maturity Matters

It has been said that Project and Portfolio Management (PPM) is largely a discussion about maturity. The more mature your key processes, the better your IT governance. As an organisation’s IT governance processes mature, it becomes more successful at doing the right projects right.

As discussed in a previous article, where project management focuses on the execution of projects, PPM looks at ensuring that the right projects are selected in the first place and that there is a balance in the portfolio of projects that is congruent with the pursuit of the strategic goals of the organisation.

Now, an organisation cannot become mature over night. Maturity takes time and effort and must be done in a progressive manner. Obviously the organisation needs to know where it currently is and what direction it should head in to make this change.

QMA
The Quick Maturity Assessment (QMA) is intended to help in this regard. It takes the form of a two hour telephone survey where key people from the organisation, with the help of an expert, answer set questions about the way it operates in seven key areas.

The output of the QMA is a report that shows, amongst other things, how the organisation scores in these seven areas. This gives the organisation a sense of what its current maturity level is. The report also details which are the areas that would bring about the most advancement in maturity for the least cost. Obviously by tackling these first, the organisation gets the most benefit for the least effort.

The screenshot below shows the Future State Maturity graph from a sample QMA which maps the organisation’s current maturity and shows where it could expect to be if it was to implement the next level of the plan from the QMA report.


The QMA is a free service that Client Solutions is now offering. Please contact us if you want to talk about your maturity and getting a free QMA.

The common misunderstanding of Project & Portfolio Management

Project and Portfolio Management (PPM) is often misunderstood to be simply a method of managing multiple projects. This misses out on the key benefit of PPM which is to do with aligning projects with the strategic goals and direction of the organisation. To assign the PPM function to the Project Management Office (PMO) is to severely limit the advantages that can be achieved from it.

The core mistake is to think that PPM is fundamentally the management of multiple projects. This definitely is not so. PPM is the management of the project portfolio so as to maximise the contribution of projects to the overall welfare and success of the enterprise.

PPM effectively bridges the gap that exists between the PMO and other business operations. It is about bringing projects into harmony with the strategies, resources and executive oversight of the organisation and it provides the structure and processes for project portfolio governance. It is not so much about doing projects right as it is about doing the right projects right. Projects that are out of line with the organisation’s strategic goals or that have excessive risk can waste precious resources and time.

The ability of managers and employees to stay strategic, i.e. focus is on advancing the organisation’s strategic goals, is vital for an organisation if it is to move forward as a single unit. If projects don’t advance those strategic goals (directly or indirectly) then they waste resources and energy. We can call such non-strategic projects ‘distracting projects’ because they misdirect parts of the organisation’s intent as defined at senior management level in the form of strategic goals. Distracting projects can be thought of as projects that negatively impact on the overall aerodynamics of the portfolio. They hinder the portfolio’s ability to move the company forward in the direction set out by senior management.

The earlier that an organisation can weed out ‘distracting projects’ the better. In fact, not starting ‘distracting’ projects at all is the ideal!

As an example of a company that successfully weeded out distracting projects consider the following the merger between HP and Compaq. During the first 90 days of the merger the global project management office stopped over 100 projects or programmes that were not aligned with the emerging strategy or made poor use of resources. This is a rather extreme example but one year after the merger they had achieved over $3 billion in savings. In a later blog article I will examine this merger in greater detail and look at the way HP implemented PPM throughout the organisation.

Communication
The integration of projects and other business activities cannot be achieved without good communication structures. Key information must be shared. Management needs to be able to clearly communicate what the strategic goals of the organisation are and the PMO needs to be able to provide visibility on how those goals are being pursued (directly or indirectly). What often happens is that both groups (management and the PMO) are off in their own worlds, working to do the best that they can pursuing their own objectives. What a waste!

PPM sets out to bridge the gap between these groups by providing two way communication. One of the best ways of describing what PPM is about is to say that it provides insight.

Management get insight into what is happening throughout the organisation in the pursuit of its strategic goals. The rest of the organisation gets insight into what direction management wants it to be moving in.

Technology
It has been said that PPM is largely about process, people and technology. The technology is vital to allow the communication to take place and provide good visibility into what is happening in the PMO. Serena Mariner provides portfolio, project, resource, demand and financial management for complete Project and Portfolio Management. Unlike other products whose bottom-up approach is difficult to implement, Mariner offers an approach that ensures rapid results and on-going incremental value. With packaged integrations to Serena ALM applications, Mariner provides complete visibility into the entire application lifecycle—from initial idea to application retirement.

For more information click on the link below or contact us to request a visit so that we can discuss the Mariner solution with you.

http://www.serena.com/products/mariner/index.html

What has changed that businesses need process management software?

The business environment in which we all operate has changed fundamentally over the last decade or so. The need for organisations to employ some form of process automation is greater than ever. So what are these environmental changes and how have they impacted businesses? In this article I will look at five environmental factors that every organisation must consider.

1. Globalisation
The Internet and email have made the world a much smaller place. This has had two profound effects on business. First, competitiveness has increased as greater numbers of companies are able to enter the most lucrative markets. You no longer need to be physically close to your customers to do business with them. A well designed Internet site can attract customers and manage the sale without the need for any personal interaction.

The Internet has also permitted the free flow of information. Information about company offerings and pricing are easily accessible to both customers and potential competitors! The net effect of all this free flow of information is that companies are becoming more homogenous. It is increasingly difficult to be dominant in a market from a cost leadership or differentiation strategy. Increased competition is driving down margins and increasing the flow of information so that any advantage gained from a differentiation strategy is soon eaten up. The only strategy left is to be more customer focused, or operationally excellent. RyanAir is a great example of a company which is doing this. The difficulty with being operationally excellent is that you need good processes that are strictly adhered to. This is something that is impossible without some form of automation.

A further effect of globalisation is geographically dispersed workforces. Increasingly we are seeing companies outsource entire business functions. To ensure that these outsourced groups are participating in the business effectively, a high level of communication and collaboration is needed.

2. Increasingly regulatory environment
Various debacles in the world of business from Enron to WorldCom have necessitated the introduction of tighter regulations on how organisations do business. Required periodic audits now interrupt businesses on a regular basis. Manually, such audits can take weeks to complete but an automated system can reduce them to a few hours.

3. Changing Labour Markets
Charles Handy introduced the term 'Portfolio Worker' to describe a way of working where individuals are mobile and move between organisations bringing their expertise with them for the duration of the project they are working on. While that prediction has not fully come to pass, it is increasingly the case that employees are staying for shorter periods in the one company and are seeking more flexible working hours and working arrangements. Where processes are embedded in employee's heads, the danger is that an organisation cannot learn from past experience. Processes need to be stored outside of individuals so that they outlast those employees in the organisation.

Employees that do stay with their organisation are also seeking more flexible working arrangements. These can include working from home one or two days a week or working hours that suit them. Obviously in an organisation where processes require immediate action from these employees, major bottle necks will begin to form. The good news is that these employees who seek more flexible working times tend to be willing to be contactable through their Blackberry, or equivalent, umbilical cords. Automated process management tools that can use these devices therefore, can overcome most limitations flexible working arrangements introduce.

4. More demanding customers
With increased competitiveness, customers have become more demanding. They are unwilling to tolerate issues getting lost in the cracks. They expect quick response times of 'minutes' or 'hours' rather than 'days' or 'weeks'. If they are not satisfied they will simply move to another supplier. All of these threats can be managed effectively with some form of automated process management system. No longer do companies need to depend on employee's remembering to keep issues open or to get back to customers with information or resolutions to issues raised. Instead automated systems can prompt employees to perform the actions necessary to enforce adherence to predefined processes.

5. Greater need for flexibility
Entrepreneurial Management is largely about managing change and being able to best position oneself to best take advantage of inevitable change. Many of the top business schools around the world have entrepreneurship management units or are offering modules in this up and coming discipline of management agility. 'Taking charge of change' necessitates having established, visible processes in place that can be quickly and easily modified. Unless these processes are managed by a tool, communicating changes can lead to confusion and mistakes.

Conclusion
The business environment has changed fundamentally in the last decade. Companies will increasingly struggle to keep up if their way of doing business (their processes) is not automated by software.

Serena TeamTrack is a web-architected, secure and highly configurable process and issue management system. It creates a clear process throughout the application lifecycle—from initial request to post-delivery customer support activities.

Thousands of companies around the world are using TeamTrack to manage processes across organizational silos and drive the highest levels of efficiency. With TeamTrack, you can control and automate any business process, manage issues throughout the lifecycle of your IT projects, and facilitate collaboration among all stakeholders across your enterprise and beyond.

For more information click on the link below or contact us to request a visit so that we can show you the power and advantages of TeamTrack.

http://www.serena.com/products/teamtrack/index.html