6. Planning for Success Flashcards

Question

Question part a) Explain three reasons how stakeholder analysis can assist in influencing and engaging stakeholders – 30 marks (10 marks each)

Answer 1

By Understanding their interest - Stakeholders need to be adequately informed and consulted regarding area of interest. - Stakeholders with high level of interest may require more info. Need to manage expectations - May want to encourage from daily to weekly updates. - May need to up the interest of some stakeholders by being more effective on comms. -Understanding how interest changes over the lifecycle can optimise engagement levels. Understand their influence / power - Different stakeholders have different power with regards to the project. - Need champions to be supporters not blockers. - May need to find a way to reduce someone's power where disruptive By Understanding their attitude - stakeholders can be blockers, supports or champions depending on level of power. Bu knowing this can devise strategies accordingly. - Blockers can be removed by removing incorrect perceptions they may have or removing obstacles it may bring. - Knowing how to change a blockers attitude will help know when, how and by whom to deliver the strategy. - Supports can be kept positive with regular comms.

Answer 2

To gain their support for the project. • Stakeholders are likely to have many differing expectations from a project. For example, the final users of the project’s output are focused on getting a product that improves their ability to do their job while the project’s investors are focused on getting return for their money. • A project’s end product or result should meet all of the important needs of the primary stakeholders. These needs should be carefully spelled out and agreed at the start of a project so that they understand what will be delivered. This will minimise changes to scope and increase likelihood of final product acceptance. • Highly improbable that all their expectations can be met within the timescales and the budget available. It is therefore vital that once the stakeholder’s expectations are understood (e.g. through good requirements management), they are managed. • This will ensure that everyone understands what will be delivered from an early stage in the project and increases the chances of the project getting support and the outputs accepted at handover. b)/2 To ensure that a project gets support it needs in terms of resources and decisions. • Ensuring that resource providers know what to expect in resource demand will allow them to plan and release resources as required. • Stakeholders also have expectations about their involvement in a project and what information they will receive by way of reports and updates. • They may not realise how much time they are expected to contribute to a project (e.g. project board meetings, design review etc) and therefore may not be available when required. This would have a knock-on effect in terms of resources support etc. • In addition, if they expect weekly updates and do not get them, they may take up a project manager’s valuable time asking questions and arranging meetings.

Answer 3

Concept. • An outline business case (BC) is created to justify investment and progression into the definition phase. • This ensures that only projects that are aligned with organisational strategy and have management support use planning resources. • This will help get support from the business and increase the confidence of the stakeholders, particularly those who commit money and resources to the project. • This will mean that the finances are allocated in principle before much effort has been expended. • It will clarify the benefits, estimated costs, timescales and risks and ensure there is a foundation for the definition phase which will take the outline BC and refine it ready for approval into deployment. a)/2 Definition. • The outline BC is refined once more accurate costs, risks and timescales are known from planning of the project. This ensures the project is viable before the project is implemented. • The definition phase provides the information to allow the BC to be baselined and as such it marks an important point of agreement and buy-in among the stakeholders. It also acts as a reference point against which benefits will be measured. • The BC is used when developing the project management plan (PMP) to ensure the PMP’s strategy aligns with the project objectives documented in the BC. • The BC acts as a basis for creating the benefits realisation plan which will be used to track the benefits once they start to be realised. • This ensures there is a focus on the BC and the benefits during and beyond the project lifecycle. a)/3 Deployment. • The BC case should be regularly reviewed through this phase, including at the phase gates, to check on-going viability of the project. • The forecast of benefits, costs and timescales compared to those planned will inform the sponsor and senior management and allow them to make a decision regarding continuation of the project. • The likely impact of proposed changes to the project (e.g. both project scope and the external environment) should also be reviewed against the BC. • A change request may have a major impact on the success criteria of a project which would make it unviable. • This will allow a decision to be made regarding a response to the change or the continuation of the project.

Answer 4

b)/1 Definition. • Benefits need to be understood and articulated in ways that can be qualified and measured. • For example, ‘increased production’ as a benefit statement is very subjective and would not be a good basis for an investment decision. • In this example, a better statement would be, ’a 25% increase in production within 6 months’. • Projects often fail to satisfy the stakeholder’s expectations because the benefits are not defined. This leads to conflict over whether the project is successful or not. • Well defined and quantified benefits which can be measured when they are realised, allow confirmation of project success and gap analysis. This identifies any shortfalls in those realised against the BC. b)/2 Tracking. • This involves progressing and measuring the benefits against the metrics agreed in accordance with the benefits plan. • The sponsor will monitor the benefit owners who are responsible for embedding the change to ensure they are being effective and that the changes are resulting in benefits. • This tracking will highlight areas where action needs to be taken such as where early indications show that there is a forecast shortfall in the level of benefits that will be delivered. • While implementing change, new opportunities for additional benefits should always be sought. • Tracking the benefits will highlight these and drive actions to increase the benefits such as increased marketing or training staff to better use a new product.

Answer 5

Project justification. • A business case (BC) provides justification for undertaking a project. It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution. It provides information to enable the project to be authorised at the start. • This will ensure that only viable projects are authorised, increasing their chance of support and success. It also stops unviable projects from consuming valuable resources. • This gives the stakeholders confidence and supports their commitment and the associated investment in terms of resourcing and funding. • The BC is also used to give ongoing justification at the gates. The project is reviewed against the BC for the likelihood of the benefits being realised and the costs involved. This ensures that projects continue to contribute to the business and that actions including realignment and termination can be considered. a)/2 To inform decision making regarding changes. • The likely impact of proposed changes to the project (i.e. both project scope and the external environment) should be reviewed against the business case. • A change request (CR) may have a major impact on the success criteria of a project which would make the project unviable. This would either lead to the CR being rejected or the project being terminated. • A CR should be assessed for its impact on the budget, timescales, risks and benefits (all key elements of a BC). If the change increases the costs and the risk but does but increase the benefits expected, then it is questionable whether it should be approved. • Alternatively, a CR’s impact on the BC may be very positive and justify approval. • Using the BC as a key reference baseline should ensure that only value for money changes are approved. a)/3 It provides a baseline against which the benefits will be measured. • As the benefits start to accrue (usually following transition) they will be tracked and compared to those documented in the baselined BC. • If the product is used to deliver all the benefits in the BC, the project will be successful as the organisation will have received the expected return on its investment. • The BC is also used as a basis for developing a benefits realisation plan which is used to determine how the benefits will be tracked. • The BC will also be used when carrying out lessons learned on the investment. This will inform future decision making and improve the development of BC’s by the organisation.

Answer 6

b)/1 Internal Rate of Return (IRR) • Used to determine the profitability of a potential investment and informs the decision of whether to invest in a project or not. • The term internal refers to the fact that the calculation excludes external factors, such as inflation, the cost of capital, or various financial risks which need to be factored in rather than relying on IRR alone. • It is the discount rate that makes the NPV zero therefore if the IRR exceeds the cost of capital, then the project should be a good investment. • The most attractive thing about this method is that it is very simple to interpret after the IRR is calculated. This is very easy to visualise for managers. b)/2 Net Present Value (NPV) • Used to understand the profitability of an investment over the life of as asset alongside considerations of affordability and strategic fit. • NPV is the difference between the present value of cash inflow and the present outflow of cash over a period of time. It is the monetary value used to judge the value of an investment at a particular discount rate. (i.e. the rate at which the value on money changes over time) • It calculates the present value of cash flows associated with an investment and uses a discount rate to show how the value of money decreases with time. • It allows different discount rates to be modelled (based on different future financial scenarios). This will allow best and worst-case scenarios to be applied to a project to understand whether to invest.

Answer 7

Establishes the processes that will be followed. • To ensure consistency and efficiency through the lifecycle, it is important that the processes are agreed and baselined before project deployment. • These processes include change control, monitoring and reporting and risk management and documenting these in the PMP will provide clarity for the team and avoid ad-hoc management. • Tailoring organisational processes to reflect individual projects will ensure that they can be applied efficiently (e.g. in a timely manner) and that individuals will not bypass them. • Agreeing these will give the sponsor confidence that there are adequate controls in place as well as a basis for auditing how well they are being applied. b)/2 Establishes the scope of a project. • the deployment baseline is developed with a focus on fully developed scope and quality as developed and documented in the PMP. • This works on the principle that all the work can be defined, estimated, scheduled, risked, resourced and costed at an appropriate level of detail. • By involving the project’s stakeholders in the development of the PMP (e.g. by gathering their requirements), their expectations and needs can be developed into costed plans. • An agreed baseline ensures that expectations are set with the stakeholders making them more likely to support the project and accept its outputs.

Answer 8

Improves chances of project success. • A good Project Management Plan (PMP) will do this by ensuring that there is a clear understanding of the project and how it will be delivered. • Having a consolidated plan is a key governance principle ensuring projects do not proceed without a full understanding of the resource commitments required and the level of risk exposure. • It will clarify and communicate the aims of the project (e.g. deliverables, timescales, costs) and the strategy of the project (e.g. procurement methods and quality processes). This improves the chances of everyone working to agreed standards and goals. • When there is conflict or uncertainty, teams can refer to the PMP for clarity and direction enabling the project to proceed without extended delays. • This will align the team and stakeholders, gain their buy-in, set their expectations and provide a means of assessing progress. a)/2 Provides a baseline for the project. • As such it marks a ‘starting point’ for the delivery of the project documenting its scope, costs and timescales ensuring clarity with the team and the stakeholders including senior management. • The baselined and approved PMP marks a point of agreement among the stakeholders including the users of what the project will deliver. This increases their buy-in and support and makes it more likely that the final deliverables will be accepted during handover. • It also reduces the number of requested changes because the PMP is not baselined until the key stakeholders are agreed regarding scope, cost and timescales. • The progress of the project and the number of changes can be assessed against the baselined PMP. It allows stakeholders to understand how the project is performing against the original agreed plan. This will allow action to be taken where necessary such as adding additional resources or de-scoping the project. a)/3 A form of ‘contract’ between the project manager and the sponsor. • The PMP documents the obligations of each role ensuring that there is clarity and agreement before its implementation. • The PMP will document what the project manager must achieve in terms of success criteria (e.g. time, cost and quality) and the strategy they will implement. This will ensure the project manager is held to account but also has a sponsor who understands what they will do. • The PMP will document the decisions needed by the sponsor at key points in the project such as gateways, resource commitments (including funding arrangement and budget release) and actions regarding escalated issues, risks and change requests. • This sets the expectations of the sponsor so that they can plan in time to conduct these activities. It also ensures that there is no confusion over who is responsible for aspects such as transition and benefits realisation.

Answer 9

Time/resources. • The deployment baseline is developed based on the resources and schedule available to the project. These are agreed upfront with the stakeholders to ensure that they are available and acceptable. • The resources and schedule are determined, but the scope and quality will be adjusted to meet these. This ensures the project meets the end users’ deadlines (e.g. a new website is needed for the new school term (even if it does not have all the feature originally asked for). • Should the agreed number of iterations be used up and the solution developed to a minimum level without the ‘should have’ requirements being addressed, the team may have to raise a change request to the sponsor to vary the scope or ask for more time and resource. • Contingency should be considered when deriving the baseline to ensure expectations of the stakeholders are managed and the amount of additional time and resource is available should it be required. b)/2 Requirements. • These constitute the scope of the project at the planning stage and needs to be agreed before committing resources to a project. • These user/stakeholder needs (e.g. the required functionality of the final product) need to be prioritised to allow a minimum set or scope to be agreed as acceptable by the stakeholders before they are baselined. • Prioritising the requirements will allow the project to be delivered on time and within the resources available by adjusting the requirements. In other words, lower priority items can be sacrificed at the expense of a higher priority one that gives greater value to the user. • An example is that the conference will provide lunch but could provide evening dinner if there is enough resource to provide by the deadline.

Answer 10

)/1 Maintains stakeholders' expectations. • This gives them increased confidence in project's ongoing forecast costs. • Initial estimates are based on incomplete understanding of the scope of work and the resources required and will need to be updated/refined as greater knowledge accumulates over time. • This gives the stakeholders confidence that updated estimates are based on lessons learned in previous phases/stages and that plans are based on experience not the original estimates. • This increases their support and ensures that the finances and decisions required by the project are supplied in a timely manner. a) /2 Improves resource management • Helps in the preparation of resources due to improved forecasts of materials needed and labour hours required. • This will allow resource providers to set aside the right amount of resource at the right time to support the project. • This helps to avoid under or over allocation of resources. This in turn minimises delays or additional costs to the project. • Where resource requirements are forecast to be lower, valuable resources can be released to benefits other projects and business as usual. • Line managers and suppliers will need to plan these resources well in advance and accurate forecasts will help them to acquire and schedule the right skills and quantities to meet the project’s needs. a) /3 Helps manage the budget • Helps to ensure that cashflows and budgets are in line with the latest expectations. • This allows those funding the project to ensure that money is available to the project at the times needed (e.g. the gates and milestone payments). • Helps the project manager and sponsor to avoid unaffordable negative cashflow or increased cost of borrowing especially where costs are likely to rise disproportionately against income. • Provides stakeholder confidence in reports on project progress and spend as they see forward planning informed by actual spend and efficiencies. • Allows contingencies to reflect the actual uncertainty at any specific point in the project life cycle

Answer 11

)/1 Analogous is a comparative method. • This makes a comparison with another similar completed project and adjusts certain factors accordingly. • These factors can include inflation, complexity and location. • Example: a project to build a new data centre. The organisation was able to look at the actual costs and timescales from similar previous successful projects. These values were taken and adjusted for inflation and price of materials and local labour rates. • This method can be performed early on the lifecycle but relies on having access to the data, being able to compare like with like, then understanding and making adjustments for any differences. • It is quick to do and is based on a real completed project and can be used to give quick quotes to stakeholders. b)/2 Delphi generates an estimate through team consensus. • A group of experts exchange views, and each independently gives estimates and assumptions to a facilitator who reviews the data and issues a summary report. • The group members then discuss and review the summary report, and give updated forecasts to the facilitator, who again reviews the material and issues a second report. This process continues until all participants reach a consensus. • The experts at each round have a full record of what forecasts other experts have made, but they do not know who made which forecast. This avoids bias. • The anonymity allows the experts to express their opinions freely, encourages openness and avoids admitting errors by revising earlier forecasts.

Answer 12

To provide a back-up plan. • It is a backup plan in place for when things go differently than originally planned. It is a defined, actionable plan that is to be enacted if an identified risk becomes a reality. • In addition to contingency for known risks, many organisations hold a contingency/management reserve for unidentified risks (the “unknown unknowns”) or for those risks that have a very low probability of occurring but would have a very high impact if they did occur. • This will allow the costed and resourced back-up plan to be used when the ‘trigger’ conditions arise avoiding the need to request additional funds from senior management or go into panic mode. • An example is having another supplier ready to step in to maintain a critical supply chain. a)/2 Increased stakeholder confidence. • Contingency will give the stakeholders confidence that the project has identified and assessed uncertainty and made provision for it in the plans. • This may be in the provision of additional time or resources (e.g. additional capacity in skills and facilities). • This will allow them to fully commit to the project knowing that there should be no nasty surprises such as unexpected resource demands. • It will also give the project manager and the team confidence when implementing the project knowing that there is provision set aside for the risks that they identified and are trying to manage. a)/3 Contingency will allow for accurate budgeting to be done. • A provision to cover estimated risk will be added to allow a justifiable baselined budget to be created. • This will allow funding for the project to be arranged with the confidence that it will cover the cost of the project. • Calculating the amount of contingency for each area of risk exposure will allow it to be allocated to these areas allowing a targeted approach. • This allows the use of contingency to be monitored and not used for inappropriate purposes (e.g. product enhancement).

Answer 13

b)/1 By forecasting time and cost outcomes. • They would do this by calculating the performance indexes (i.e. cost performance index and schedule performance index) and apply these ‘efficiency’ factors to the planned budget and scheduled end date. • This may indicate that the project is facing either an over or under spend and either early or late completion. • This may entail updating the budget and the schedule to inform stakeholders of the likely outcome and prepare them accordingly. While this may cause initial conflict, it will help to manage their expectations. • They may have to add more resources to the plan to bring the project back on schedule. The resource schedule will be updated in this case and assist in forward planning. b)/2 By calculating percentage complete • By looking at the ratio between the planned budget (i.e. the maximum that can be earned) and the earned value to date the percentage complete can be used to update the schedule and the budget in the project management plan. • This can be used to understand the status of individual work packages and the project as a whole. • Where this shows that the project is likely to finish outside its upper tolerances the requirements, scope and quality may need to be adjusted to allow the project to be recovered. • Where the project is forecasting early delivery, handover/transition plans will need to be adjusted. This may affect aspects such product storage, re-scheduled operational activities and payments.

Answer 14

Collection. • Information must be collected into an organisation’s system and it is important that this is done in a planned and controlled manner. • If this is not done, it may not be possible to know what information is available and where it is. • An organised collection system must cater for the different types, different formats and various sources of the information. Examples of this are scanning paper documents into electronic format and documenting their date of arrival. • Where collection is electronic, security (e.g. virus checking) measures must be implemented to protect the integrity of data. • Clear roles and responsibilities need to be agreed and allocated for collection to ensure that the process is carried out in an organised and efficient manner. Reliability of the information and its source should be considered. a) /2 Storage. • Information needs to be available and it is therefore vital that it can be found and accessed by those allowed to do so. • Aspects of storage include information security and robust back-up to ensure its continued availability to the project. • Examples of this are locked and controlled filing cabinets for different levels of national and commercial security, fire and smoke-proof storage, cloud-based storage for electronic data and strict criteria on who can have access to information. • An agreed and well-structured filing system will support efficient management ensuring that people can find information in a timely manner. This will minimise delays and also ensure that evidence is available in contractual conflict situations. a) /3 Dissemination. • It is important that information is controlled regarding its withdrawal and distribution therefore the process should ensure that there is a record of who has been sent information, when it was sent and the version or variant that was sent. • This will provide an audit trail as well as ensure that the implications of changes to information are understood (e.g. who should receive an updated version). • Without this knowledge, time and effort will be wasted and a degree of confusion will result. • Distributors should also ensure that the information is treated with the appropriate level of confidentiality or security, by the recipients. • Dissemination is informed by the project communication plan and organisational policy to ensure that the right people get the right information in the right way.

Answer 15

Time. • Additional time is set aside to deal with risk events that threaten the agreed timescales of a project. • This can nominally be calculated by multiplying the probability of the risk happening by the estimated time impact. • This will allow this provision to be used when the risk occurs without having to apply for addition time to senior management. • In critical chain scheduling, contingency is removed from individual activities and used as a buffer at the end of the schedule. This will help the project manager to monitor contingency erosion and take action as necessary (e.g. de-scoping the project). b)/2 Money. • Additional money is set aside to deal with risks that threaten the project budget. It is calculated in the similar way as time contingency, but with the impact on budget. • It should form part of the overall budget and can be categorised as contingency (known unknowns) and management reserve (unknown unknowns). The former may be held by the sponsor or project manager while the latter may be held by corporate. • Examples of financial contingency include money to pay for re-work, additional resources and reapplication of planning permission. • Having this provision will mean that the project is not held up waiting for additional funds as they have already been set aside.

Answer 16

Progress against the schedule. • This allows the stakeholders to understand how much the project is achieving and how this compares to the baseline plan. • This actual progress enables a realistic forecast of final completion of a phase and a project to be produced. • This information is used to produce action plans where a project is under or over performing (e.g. adding additional resources to improve progress). • Can trigger a change in project scope to enable completion on time or additional resources to deliver full scope within time constraints. a)/2 Quality approvals. • This allows the sponsor and the stakeholders to understand how many products have been approved against those planned and how many remain unapproved. • This enables trends to be identified and action to be taken accordingly. • An example is a high number of non-conforming items found during testing. This may be due to the deficient skill of the producers which can be remedied through training or finding a better supplier. • The report may also propose remedial measures and highlight areas where support and decisions are required by the sponsor (e.g. additional resources for testing and a change to original acceptance criteria). a)/3 Stakeholder status. • This will indicate the level of their engagement and support for the project. It is important to monitor their actual behaviour against what was expected. • This might be measured by meeting attendance, provision of resources or complaints (e.g. lack of meeting attendance may indicate that stakeholders do not understand the importance of the project). • The baseline for reporting is the communication management plan and the results of stakeholder analysis. Feedback may necessitate action such as changing the method of communication, the sender or the content. • The report may also propose additional measures to engagement stakeholders and request help from the sponsor to add their weight to communication.

Answer 17

Adjust resources. • Because the project is not earning value quickly enough the project manager can apply additional resources (e.g. labour) to reduce the overrun by 2 months. • This would bring the project in on time but will have the effect of increasing costs which are currently forecasting an underspend of £24k). • This may not have the desired effect if the remaining work efficiency does not follow the trend so far (e.g. different activities which would not benefit from more resources due to space limitations or health and safety regulations). • Alternately the project manager could improve the skills available (e.g. training the team) to do the remaining work faster. This may reduce the duration and have less impact on costs than bringing in additional resources. b)/2 Adjust scope/requirements. • If time is a key driver for the project and it is not possible to remedy the situation with additional resources, the project manager can reduce the scope/quality/requirements of the project to those must-haves and should-haves. • This will result in reduced effort and reduced scope to be delivered on time. • The project manager would need to get this change approved and the overall value of the project re-baselined as earned value management is based on an approved and protected baseline. • Plans would then need to be issued to implement the new scope. • This option will provide an opportunity to save actual costs while providing acceptable value to the stakeholders.

Answer 18

Supports better forecasting against time and budget. • By using and correctly interpreting earned value data including actual costs, planned costs and earned value, forecasts are based on objective analysis rather than a subjective approach (e.g. an individual view). • By using actual data (based on evidence of progress) and the efficiency of work in progress (using cost performance index and schedule performance index), likely outcomes can be visually plotted graphically. This assists with reporting and helping stakeholders to understand likely outcomes. • This will help manage their expectations and increase their confidence in forecasts. a)/2 Incentivises suppliers. • Allows incentivised payments to be made to suppliers based on what they have achieved rather than on costs alone. • This is measured in terms of their earned value (e.g. percentage complete x budget at completion) rather than just milestone payments. • Additional payment can be achieved when the supplier completes additional work over and above that planned to meet the milestone. • This in turn incentives them to overachieve and improve their cash flow. a)/3 Allows trends to be understood. • It provides opportunities to look at efficiency of spend (through the cost performance indicator) and productivity (through the schedule performance indicator). • By progressively monitoring these, trends can be used to drive actions where there is under/over performance. • By monitoring performance in different areas of the project, trends related to specific teams can be understood allowing targeted action. • The impact of actions (e.g. applying additional resources) can be monitored by looking at the trends (usually in graphical format such as CPI and SPI based bullseye diagrams). This will show whether actions are being effective.

Answer 19

To provide a back-up plan. • It is a backup plan in place for when things go differently than originally planned. It is a defined, actionable plan that is to be enacted if an identified risk becomes a reality. • In addition to contingency for known risks, many organisations hold a contingency/management reserve for unidentified risks (the “unknown unknowns”) or for those risks that have a very low probability of occurring but would have a very high impact if they did occur. • This will allow the costed and resourced back-up plan to be used when the ‘trigger’ conditions arise avoiding the need to request additional funds from senior management or go into panic mode. • An example is having another supplier ready to step in to maintain a critical supply chain. b)/2 Increased stakeholder confidence. • Contingency will give the stakeholders confidence that the project has identified and assessed uncertainty and made provision for it in the plans. • This may be in the provision of additional time or resources (e.g. additional capacity in skills and facilities). • This will allow them to fully commit to the project knowing that there should be no nasty surprises such as unexpected resource demands. • It will also give the project manager and the team confidence when implementing the project knowing that there is provision set aside for the risks that they identified and are trying to manage.

Answer 20

Parametric estimating uses a statistical relationship between historical data and other variables (e.g. units of floor area in construction) to calculate an estimate for activity parameters, such as cost, budget, and duration. It can be used to estimate a whole project or tasks within a project and will often be combined with other estimating techniques. Benefits: It can be useful for a quick estimate against a high level scope and can be extremely accurate if the database is kept up to date and the correct parameters are used. Because statistical data is used, parametric estimating removes human bias. Estimates are justified by facts – actual outcomes from previous tasks and projects. This technique can produce higher levels of accuracy depending upon the sophistication and underlying data built into the model. There are ‘black box’ commercial tools available, but it is often preferable for experts to build bespoke models. Uses defined parameters by which work can be measured and uses the results to predict values in the current work.

6. Planning for Success Flashcards

(44 cards)