Project Partners Blog

Gartner’s February 2008 report “PMOs: One Size Does Not Fit All” found that there are very high rates of failure when setting up a PMO. Success or failure depends largely upon two aspects:

1. How closely the PMO’s mission and objectives are linked to the real needs of the organization, and
2. How well the role of the PMO is matched to the maturity of the organization.

As Project Partners has written in prior whitepapers and presentations (See Return on Investment – Building the Business Case for Project Portfolio Management and Return on Investment – Building the Business Case for Professional Services Automation), you should not attempt to become a Level 5 organization immediately – you need to evolve.

Benchmarking your organization’s maturity

As we have stated in the whitepapers referenced above, and as Gartner states in their 2008 report, the key to setting up a successful PMO is to first understand where your organization fits in the “Maturity Model” and then to organize a PMO structure that fits in your organization’s maturity model. The main goal should be to continuously maturing your organization’s PMO, moving up the scale from Level 0 to Level 5. The optimum level of maturity is recognized as being the level that delivers your organization’s strategic objectives most effectively and efficiently, and for many organizations that does not necessarily imply you must reach Level 5.

PMOs: One Size Does Not Fit All Feb 2008, Gartner Inc. http://mediaproducts.gartner.com/reprints/computerassociates/143645.html#1_0<!–%20entry%20label%203–>

How can you improve Organization/PMO maturity?

1. Establish a vision. In order to know whether or not your efforts are successful, you must be able to articulate what will be different about your organization after you’ve launched the PMO
   
2. Process. Adopt project management methodology, institutionalize its use within your organization, assign owners for every process, and use it and improve upon it continuously.
   
3. PPM software. Introduce PPM software which enables more efficient and effective project, program and portfolio management delivery and support processes
   
4. People Power. Expand project managers’ communications and interpersonal skills.
   
5. End Result Driven. Encourage project manager certification, but manage, appraise, and promote based upon the end results achieved by project managers.
   
6. Management Buy-In and Support. Strengthen involvement and support by executives and the leadership team by giving them what they need in order to be engaged, make effective decisions, and appreciate and support the project management maturity needs of the organization. Often this can be achieved via executive-level PPM software reports and/or dashboards.
   
7. Project Planning/Execution. Developing effective and detailed plans at the beginning of the project; execute the project according to plan established.
   
8. Reporting. What is not reported is not measured. Use scorecards and dashboards to keep everyone informed and involved.
   

    

Where does your organization fit in the maturity model?

In order to know what the focus of your PMO should be, you need to first conduct an honest assessment to determine where your organization presently fits in the maturity model.

As a project manager not only responsible for managing my project, but also asked by senior management to create a budget at the start of an engagement, and then to submit weekly forecasts showing my anticipated revenue stream, how can I possibly find the time to get this accomplished using Oracle Project Management?

 We implemented Oracle Project Management because it has the robust functionality we need, but the truth is I need to quickly update my numbers and get back to managing my project. It takes me over 20 screens to make weekly updates to my project forecast, and I have to be in the office to do that. In fact, I am in and out of the office, with barely little or no time spent connected to the network.  Most of my time is spent on an airplane or at the client site managing my project. How can I accomplish this quickly and easily without the monthly frustration?

Project Partners UI-Apps was implemented to address this need. UI-Apps provide a simple user interface in a familiar tool (MS-Excel) that allows Project Managers (PMs) to review and maintain project plans at their convenience. It is built to work seamlessly with Oracle Project Management and provide PMs with a simple solution with built-in industry specific processes for Professional Services Organizations. Additionally, only those Oracle Project Management functions relevant to our company are included on our UI-Apps worksheets.

PMs log into Oracle (from MS-Excel) whenever connected to the office intranet, download project information to the UI-Apps worksheets, and save these worksheets to their local machine. They can now go on the road and review and update information into the UI-Apps worksheets at any time – and whenever they next connect to the office intranet, they simply upload the updates back to Oracle.
Additionally, the most recent actual costs can be viewed, (as entered and summarized in Oracle), compared with the current budget, and the weekly forecast can be updated to reflect the situation as it now stands. UI-Apps provide both lump-sum and time-phased planning capabilities, so our PM workbooks contain a lump-sum budget worksheet, and a time-phased forecast worksheet. A convenient summary report allows PM’s to review actual costs as well as planned amounts for rows of tasks by expenditure categories displayed in columns.

In each of the worksheets, PM’s can change dates of tasks and resources, add new tasks, indent, outdent them, or otherwise modify the WBS, add or change resources assigned to tasks, and since UI-Apps has downloaded the appropriate burdened cost rates, and bill rates for these resources, PM’s can make good use of their travel time, and have a complete up-to-date forecast ready to upload when they return to their home-base destination. Even for multiple month engagements, entering time-phased Estimate-to-Complete amounts is easy because of flexible methods for displaying a project’s periods, and a unique spread-method feature which allows entry of total amounts – and the worksheet automatically spreads it over the displayed periods. Certain periods can be modified as needed – with the total being updated accordingly.
 

UI-Apps gives our PM’s the option to update workplans simultaneously while updating their financial plans. In certain cases, for complex engagements, we choose to track workplan progress and with UI-Apps, updating percent complete and entering progress status is easy to do in the same worksheet as we update our forecasts. With one click, the week’s plan is uploaded and submitted into our corporate workflow for approval.

As the IT team implements more UI-Apps functions, or rolls out the latest UI-Apps release, we don’t have to worry about being out of synch with the current code, or missing an update notification because each time we connect to the Oracle instance, UI-Apps checks for the latest workbooks and prompts for download of the latest version if out of synch.
 

There is no doubt that senior management now has a firmer grasp on the profitability of our portfolio of engagements with up-to-date forecasts from UI-Apps.

Project Structures

 Almost any sizeable work effort in the professional world can be treated as a project and is governed by few fundamental rules or best practices. Oracle Projects is one module of the Oracle E-Business suite which helps address the business need for different project structures for planning work and finances. It caters to different kinds of integration methodologies so that there is no repetition of data entry, there is extraction of the correct data from the right source and a clear representation of the business case exists.

 A project structure can be setup in four different ways to cater how the projects are planned, executed and controlled:

 Fully shared structure: A single structure of tasks is used for both workplan and financial plan functionality. These include the workplan, progress, budgeting and forecasting, costing, billing, etc. A fully shared structure is useful in scenarios where projects are planned with few work details, which could complicate managing the project’s finances. There is only one set of actuals that will be displayed across both the workplan and the financial plan which means greater consistency and ease of managing and controlling finances.

 Partially shared structure: A single task structure is used. However the higher level task nodes are used for managing finances while the lower nodes are left for managing work and resource planning. 

This is particularly useful in the Engineering and Construction industry where the workplan is extremely detailed and the financial plan has a simplified structure of the workplan using selected higher nodes.  This allows the financial plan to use the same workplan’s top node structure without creating a separate financial structure.

 Non-shared, mapped: Two different sets of tasks, one for workplan and progress functionality, the other for budgeting and forecasting, costing, billing, etc. This allows information captured on the workplan to be used on the financial structure by mapping workplan nodes to lowest financial tasks. 

This is particularly useful in professional service companies where multiple tasks like business requirements gathering, development, etc. can be applicable to, or on-going for, multiple functional domains of a project.

These tasks will make up the detailed workplan structure while finances will be managed only according to the (higher-level) project domains. The progress collected for tasks map to each domain. Domains are rolled up from workplan tasks to the financial structure. This helps with financial management. Budget generation can use the mappings to generate a budget from the workplan.

Non-shared: Two different sets of unrelated tasks. Workplan and progress data is independent of financial data.

 Workplan Structure Versioning
For a better control of the planning and execution of the project, the workplan structure can be versioned. Workplan versioning can utilize an approval mechanism to control publication and re-planning of work. This helps in maintaining historic data for the workplan and progress functionality to do what-if analysis at various stages of project execution.

Project Managers can leverage rich features of scheduling tools like Microsoft Office Projects and Oracle Primavera by implementing the integration with these project structures.

Choosing the right scheduling tool coupled with the right structure type, versioning, etc. will make Project Managers more efficient and give them a better control over the project during the entire life cycle of project.

When projects go wrong, they generally go wrong at the beginning. As my experience is largely in the defense industry, most of the following is derived from those experiences. Poorly defined requirements lead to poorly defined statements of work and specifications which lead to unrealistic expectations both at the customer and at the supplier. This fundamental communications issue blights projects and affects them throughout their life cycle. Why do project teams make these same mistakes over and over and over? After scores of interviews and post-mortems in the last twenty years, it unsurprisingly comes down to poor practices and lack of discipline. Is this the project team’s fault? Only partly. Often it is the customer’s fault, particularly in the world of government contracts. That the US Government attempts to employ good project management practice is a given; however their shortcomings are three-fold.

First, the program managers may be on promotion track, and that means reluctance to admit to problems.

Second, the program controls / Earned Value organization seems often more interested in accounting than in project management.

Third, the persons developing the statements of work and technical requirements fail to make them both clear and realistic.

Let’s start with the last first, as that is where a project can be at risk from inception. The problem with statements of work for major development procurements is that the persons writing them often either do not know how to define the requirements, when the aim is inventing technology, or they may have a jaundiced view of requirements definition, i.e. they want to leave certain things “obscure” in order to maintain a degree of “flexibility” in the future or they want to “challenge” the supplier to create a “better” solution. The former circumstance is merely a fact of life, but the later creates misunderstandings leading to unnecessary changes, do-overs, delays, and increased cost without advancing the project toward the ultimate goal of providing what the end-user needs. Over the last twenty years I worked with several engineering managers who avoided stating firm requirements because of the mistaken ideas that firm requirements tied their hands or reduced “creativity”. This then is a warning sign for the risk identification process…ill-defined requirements mean greater exposure to both buyer and seller.

So how does the “seller” correct this when it means telling the customer the he isn’t really doing a good job? The IT services model of defining requirements through joint analysis and jointly agreeing on requirements is a good one, as is employing the intent of the spiral project life cycle model which allows the risky bits to be identified and resolved at the lowest possible cost. If the risks cannot be reduced, then the project requirements and objectives can be modified or, if the costs begin to exceed the benefits, then the project may be abandoned entirely. This again will require a close relationship with the customer and may be a difficult sell on the supplier’s part. It certainly is worth approaching when you find yourself in the vague statement of work circumstance. One successful technique is to put that reluctant technical manager in the seller’s situation by asking him if he would sign a firm, fixed price contract as a home builder based only on an artist’s sketch of the house. You can infer what to do with the analogy from there. Ideally, we would want that technical manager to hire us to design the house in addition to building it. However, he still must provide basic requirements for us, for him, and for the project to be successful.

Establishing plain, straightforward, and honest communications is the only method for dealing with the first circumstance, that of a customer project or program manager who, for whatever reason, doesn’t want to hear about problems, issues, and risks. This, for the seller, may be a no-win situation, but it is better to have warned the customer’s project manager and to have told him the truth rather than being complicit in a disaster. A manager friend of mine had a sign on his desk “Come to me early with a problem, and you have a partner in finding a solution. Come to me late with a disaster, and you have a judge.” I employed that thought literally when I sat the customer project manager chair. That was one of the first discussions I would have with the seller on a newly contracted development project. It may be painful, but it works, and the pain is short term, rather than a reputation destroyer.

Using earned value as a project management technique is essential. That the Government’s EV people come from a financial background may present a challenge when attempting to design, organize, and build a project that results in meaningful measurements and statistics. I found three things crucial in earned value management: objective measurements, a deliverable/product breakdown structure as opposed to a “product-oriented” WBS (this often required deviation from the government’s contract WBS or MIL-HDBK-881A), and using labor hours for EV measurements on labor efforts. I’ll discuss each of these in a subsequent blog.

The information below provides an overview of the reporting and metrics available in Project Analytics for Project Executives. The pages have been configured to use Quarters; however, Period could have been configured as the ‘time grain’ instead. The information on each tab in the Project Executive area has been taken from the Dashboard Index. Additional information below each of the screenshots describe details of the metrics and functionality within each of the interactive dashboard pages.

Project Executive

Screenshots of the default dashboard for each tab within the Project Management reporting area are shown below. Results in the dashboards can be filtered using the parameters at the top of each dashboard (Fiscal Year, Fiscal Quarter, Fiscal Period, PA Period, Business Unit, Organization, Project Manager Name, Project Class, Project Type, Program Name, Project Name, and Service Type). Additional query modifications are available using the ‘Modify’ link.

2.1 – Overview

Provides the default aggregated view of information for all the organizations satisfying the dashboard filter criteria, with the ability to drill down to project details that each organization responsible for. This dashboard page provides quick overview of Inception-to-date performance, variances, and the number of projects that each organization is currently executing and their profitability and cost performance.

ITD Performance (Forecast, Budget and Actual) by Quarter and Organization uses Views (Chart, ITD Data, and ITD Variance) to display the information. You can drill thru to Project Invoice Aging as well as to Project Commitments. The graphs include ITD Margin %, Cost, Revenue Margin, Forecast Cost, Forecast Revenue, Forecast Margin and Forecast Variance.

Projects in Progress uses Dimensions (Organization and Project Type) to Display (Chart or Table) the number of ongoing projects. Changing the Dimension changes the display for the charts adjacent and those listed immediately below. Project Health by Margin Performance Displays (Chart or Table) the health of the projects with accumulated revenue (On Track, At Risk, Critical).

Profitability Summary by Organization Displays (Chart or Table) the margin percentages of the projects. Revenue Amounts and Margin Amounts represent the axes of the graph. Cost Performance by Organization Displays (Chart or Table) Percentage Cost Variance by the Dimension selected. You can drill thru to Cost Budget Details by Organization.

2.2 – Profitability Management

Provides the detailed profitability information for the organizations and the projects under the organizations with the ability to drill down to projects, tasks and resources. It provides the comparisons of the profitability to the budgets and forecasts, and period over period changes in the margin, including trending with the ability to drill down to the project, task and resource details.

Actual Profitability by Organization, Project Class, Project Type allows you to report by Project Organization (show above), Project Class, Project Type or Program. You can View the information by Margin Percentage, Margin, Revenue, Cost and Data. Above, Actual Margin Percentage is compared to QAGO (one quarter prior) and Actual Margin. You can drill thru to Actual Profitability Year Over Year by Organization.

Forecast Profitability by Organization, Project Class, Project Type allows you to report by Project Organization (above), Project Type, Project Class, and Program Name. Forecast Margin Percentage by Project Organization is displayed above. You can drill thru to YTD Profitability by Organization.

Profitability by Top Job Codes Displays (Chart or Table) Margin Percentages for all the Top Job Codes. You can click on the link to view Profitability for all Job Codes.

Profitability by Top Customers Displays (Chart or Table) Margin Percentages for the top customers. You can display Profitability for all Customers as well.

Actual Profitability Trend by Fiscal Period uses Views (Trend, Revenue Distribution, Cost Distribution, Margin Distribution and Data to report Actual Margin Percentage, Actual Revenue and Actual Cost. Margin Change Quarter Over Quarter Trend by Organization uses Views (Margin Percentage Change, Margin Change, and Data) to report quarterly margin changes.

Profitability Details by Project Organization Summarizes (Project Organization, Project Class, Project Type, or Program) Revenue Budget, Cost Budget, Actual Revenue, Actual Cost, Actual Margin, Actual Margin Percentage, Forecast Revenue, Forecast Cost, Forecast Margin, Actual/Cost Budget Variance, and Forecast/Budget Cost Variance.

2.3 – Cost Management

Provides the detailed cost information for the organizations and the projects under the organizations with the ability to drill down to projects, tasks and resources. It provides the cost comparisons of organizations, programs, expenditure categories, and cost variances by top projects, top resources, including trending with the ability to drill down to details.

Actual Cost by Organization by Financial Resource uses Dimensions (Expenditure Category, Project Organinzation, Project Type, Program, and Supplier Name to Display (Chart or Table) Total Cost, Raw Cost, Burden Cost, People Cost, Equipment Cost, Billable Cost, Non-Billable Cost, Capitalizable Costs and Expenses. You can also drill thru to Actual Efforts by Organization by Financial Resource.

Cumulative Cost Variance by Top Projects Displays (Chart or Table) ITD cost variances for your top projects. You can view this information for all projects via Cumulative Cost Variance by Project. Cumulative Cost Variance by Top Resource displays variances for top resources. All resources may be viewed via Cumulative Cost Variance by Resource.

Actual Total Cost, Billable Cost Trend by Fiscal Quarter displays Cost, Billable Cost, Non-Billable Cost, and Billable Cost Percentage by quarter. You can click on the Fiscal Quarter to view Cost Trends. This information is displayed in tabular and graphical format.

You can drill thru to Cumulative Cost Billability by Project, Cumulative Cost Variance by Project, People Effort Trend by GL Period, Cumulative Cost Trend by Fiscal Period, and Cost Transactions.

Cost Trend by Fiscal Period has two Views (Summary by Fiscal Period, Details by Project) of Current Cost Budget, Forecast Cost, Billable Cost, Non-Billable Cost, Actual Cost, Cost Percentage Spent, Cost Variance and Cost Variance Percentage. The information is display both in tabular and graphical format.

2.4 – Revenue Management

Provides the detailed Revenue, Billing and Funding information for the organizations and the projects under the organizations with the ability to drill down to projects, tasks and resources. It provides revenue, billing and funding comparisons of organizations, customers, and programs, and revenue performance by top projects, top customers including trending with the ability to drill down to details.

Revenue by Organization by Customer uses Dimensions (Customer, Revenue Category, Project Organization, and Program) to Display (Charts or Tables) to compare Revenue to Bill Amounts. In the table format, you can click on Project Organization to drill to Project or Project Manager details. Unearned Revenue vs Unbilled Receivables shows these amounts by the dimension selected.

Revenue by Project Location initially displays the information by Country. You can click on the country to view revenue details by Project State and Project City. You can drill thru to Revenue Trend by Project Location by Fiscal Quarter.

Revenue by Top Customers by Top Projects allows you to select Dimensions (Customer or Project Name) to Display (Chart or Table) Margin and Margin Percentage by the dimension selected.

Revenue Trend by Fiscal Period allows you to choose a View (Summary by Fiscal Period or Details by Project) Current Budget Revenue, Forecast Revenue, Revenue Amount, Bill Amount, Unbilled Receivables, and Unearned Revenue. The information is displayed in table and graphical format. You can drill thru to Cumulative Revenue Trend by Fiscal Period, ITD Actual Revenue Details by Organization, and Revenue Transactions.

Funding Details by Organization displays Initial Funding Amount, Additional Funding Amount, Adjustment Funding Amount, Cancelled Funding Amount, and Net Funding amount by Project Organization. Remaining Funding Amount by Organization for Active Projects displays Project Organization, Customer, Funding Amount, Revenue Amount, Remaining Funding Amount, and Remaining Funding Amount Percentage in a table.

Lost Funding Amount for Closed Projects shows Project Organization, Customer, Funding Amount, Revenue Amount and Lost Funding Amounts. You can also drill thru to Remaining Funding Not Started by Organization or to Agreement Summary by Organization.

Summary

The Project Executive area of Project Analytics provides those users whose organizations are responsible for running projects the appropriate level of visibility into the type of information they need to effectively manage and forecast results for the enterprise. And since the pages are interactive, managers can focus on the metrics that are meaningful to the organization and download that information as needed.