Workshop 3 Flashcards
1
Q
What is the definition of stakeholder
A
The organisations or people who have an interest or role in the project or are impacted by it
2
Q
Examples of stakeholders
A
Sponsor Senior management End users Peers Sub-contractors/vendors External regulatory bodies Government bodies Trade unions Customers Pressure groups Local residents
3
Q
Define the importance of stakeholder management
A
Stakeholders must be managed to ensure that support is maintained and opposition to the project is removed, or at least minimised. Stakeholder positions and perceptions can be a major source of risk to any project. Ultimately, stakeholders will have a key role in defining the projects benefits and success criteria and judging whether these have been achieved or not. Their influence and interest can not be overstated.
4
Q
How is identifying and managing stakeholders intrinsic for good project management?
A
- although success criteria will be established for a project, who judges whether or not they have been met
- stakeholders may have enormous knowledge specific to a project that can increase the validity of needs statements, designs, plans and operations
- stakeholders will have historical knowledge that may assist in estimating and risk assessment
- a broad perspective stakeholders avoids the issue being dominated by a minority view. Stakeholders with polemically different views can be offset against each other
- appropriate stakeholder management prevents biased or incorrect interpretation or reporting of events and plans
- stakeholder management prevents individuals holding unreasonable expectations of a projects outcome or benefits
5
Q
Define the stakeholder management
A
The systematic identification, analysis, planning and implementation of actions designed to engage with stakeholders
6
Q
Define the stakeholder management process
A
Although the stakeholder management process starts in the concept phase, it is very much a dynamic and iterative functions as opposed to being sequential in nature. As the project progresses, the situation will change. New stakeholders will arrive, others will fade into the background and some may change their views. The situation therefore has to be monitored and managed throughout the project
7
Q
What is the process to structure and formally organise the engagement with the projects stakeholders
A
- identify the stakeholders
- assess their respective positions and capabilities in relation to the project and use this information to prioritise the stakeholders
- plan how to engage and communicate with them
- engage with them by means of ongoing management of the relationship with them (and their successors)
8
Q
What are the steps of stakeholder identification
A
- organisations, groups or individuals who will directly affect or be affected by the project
- organisations, groups or individuals on the periphery of projects who will influence attitudes and behaviours
- resources needed for the project
- statutory and regulatory bodies
9
Q
What are the key objectives to communication planning
A
- keep a high level of awareness and commitment
- ensure that expectations do not deviate out of line with what will be delivered
- explain what’s changed will be made and when these will be effected
- describe the desired future outcome
10
Q
What do you need to consider for comms plan
A
Audience
- who needs to receive or send information?
- what you should know?
- names/roles/departments
- who are they? (Decision Makers/Finance/technical/users)
- their knowledge of me/my department/role
- their hopes/expectations about what I hope to communicate
- how will they react - agree, disagree, neutral
- their knowledge about the subject so far
- their point of view/concerns
- what do they need?
- why are they attending/reading the communication (to get information/facts, to be persuaded, to find out what to do next, to make trouble)
Purpose
- why do they need to send or receive the information?
Some typical purposes of comma are:
- set out instructions to be followed
- describe something by providing facts to help ‘picture’ it
- explain how or why something works or happens
- persuade someone that something is a good or bad idea
Timing - when do they need to send or receive the information? Media used in comma - oral, face to face - oral, not face to face - written - electronic - visual
Format and medium
- What type of communication will the audience want?
- Presentation, short prose document, discussion,
formal report
- Electronic or hard copy.
The main media used to communicate in a business setting include, but are not limited to:
- Oral, face to face
- Oral, not face to face
- Written
- Electronic
- Visual
There are four main communication paths for project managers
- Upward to management
- Laterally to internal groups
- Laterally to external groups
- Downward to team members and subordinates
Feedback
-how will feedback be provided or obtained?
Other planning considerations
- what to include in the plan could be a full record of contact details per stakeholder - this would include aspects such as contact telephone numbers; email addresses; physical address and postal address; as well as alternate contact in the even that stakeholder in unavailable
11
Q
Outline stakeholder engagement and ongoing management
A
Engagement with the stakeholders will entail monitoring and controlling the communications activities in relation to what has been planned and, ultimately, closing down the communications activities as stakeholders depart and/or at the end of the project.
Throughout the projects, lessons should be sought and acted upon
The project manager will need a full awareness of the contractual factors that may influence the project, not least of which will be the relative level of power the project manager possesses when compared to his or her stakeholders. Projects managers may need to utilise their personal networks and/or undertake a certain amount of lobbying to ensure that objectives remains in track.
The sponsor is responsible for ensuring that all the early Information relating to the project stakeholders is captures and included in the business case. The sponsor also has a key role throughout the project as the ultimate arbiter or ‘referee’ of any disputes between the project stakeholders
12
Q
What is information management
A
The collection, storage, dissemination, archiving and destruction of information. It enables teams and stakeholders to use their time, resource and expertise effectively to make decisions and to fulfil their roles.
13
Q
Describe information management
A
Collection - the information management system should define how data is collected in order that quality information may be derived from this data. The information management policy should define roles and responsibilities relating to acquisition of project information, including the required timescales for its collection
Storage - a decision needs to be taken as to what I formation is stored, how it is stored and where. Ease of access and retrieval are likely to be prime considerations as will security and confidentiality; for example, password protection and certain pieces of information.
Data storage capacity may also be a key factor in determining what level of information to on should be stored within each project repository (project folder, intranet)
Dissemination - information needs to be distributed to the right people at the right time. Electronic media can help to expedite this process whilst also providing evidence of the informations distribution and retrieval. Organisational policies, stakeholders analysis and the project communication plan are primary inputs to this process.
Archiving - information is likely to be archived throughout the project life cycle. Factors to consider will be similar to those discussed when deciding how to store information. Ease of use and access will play an important part in determining the usefulness of archiving systems
Destruction - organisational policies regarding the retention and destruction of project information will be heavily influence by legislation and statutory obligations. Retention schedules should be clearly defined. Redundant information can be found in archival systems. It is typical for a large amount of project information to be purged at project handover and closure, allowing a more concise and effective archival system. It may also be important to consider whether business-as-usually activities might require future access to project information.
14
Q
What questions should help plan an effective information management approach?
A
- what are the sources and types of information?
- what is the indexing systems?
- what are the access permissions?
- what is the retention approach?
- what are the information flows?
- what is the information collection and distribution approach?
- what are the production scheduled - reporting cycle?
- what are the methods of handling changes?
- what is the audit trail - document management?
- what computer-based information systems will be used?
- what are the roles and responsibilities?
- what are the information management regulations, procedures, standards and guidelines?
- how does it fit within the overall project management structure?
15
Q
What system can be designed from the questions asked from the information management plan?
A
- storage
- format of information
- acquisition of information
- document creation
- timely retrieval
- distribution
- version control
- retentions schedules
- security
16
Q
Define the business case
A
The business case provides justification for undertaking a project or programme. It evaluated the benefits, cost and risk of alternative options and provides a rationale for the preferred solution.
17
Q
What is the purpose of a business case
A
the business case defines ‘why’ a project is being undertaken by providing a justification for the investment in the project. This justification is typically supported by a comparison of the projects quantifies costs and benefits.
The business case provides a clearly presented rationale for the investment, to gain management commitment and approval for investment in business change. It provides a framework for informed decision making in planning and management of the business change and subsequent benefits realisation.
Projects are a means to an end, not an end in their own right. Project justification for their project as it will provide them with the information. They need to make day-to-day decisions during their planning and delivery of the project.
18
Q
What are the contents of a business case
A
Background
- sometimes referred to as ‘reasons’
- where does this project fit into the bitter picture
- this section will also list the main objectives of the project
Options
- alternative strategies should be investigated including the do nothing option
- assumptions used as a basis for any assessment should also be listed here
Benefits
- this section of the business case will identify and value the expected benefits in order to justify the project
- it should also contain information about any dis benefits I.e. adverse consequences of pursuing the investment in the project
Commercial aspects
- high level costs
- an investment appraisal should be performed and the results included in the business. See
- funding arrangements
Risks
- the major risks and overall risk levels will be covered in this sec to on to the extent that the form part of the balance of justification
Timescale
- a summary or high level view of the likely timescales for the project
19
Q
Explain the business case development and maintenance
A
The business case is the key output of the products concept phase and documents the initial idea as well as providing the information required to subsequently scope and plan the project in detail.
The business case is revisited throughout the project life cycle to confirm that the project is still a viable and worthwhile investment. It is the sponsor who is responsible for ensuring that the business case remains viable throughout the project life cycle. At a minimum this will involve formally revising the business case at each stage-gate to ensure that it is not impacted by factors internal or external to the project
The primary use of the business case at project closure is to determine whether the prod CG manager and team have managed to deliver the product g in compliance with the agreed success criteria.
Finally, during the products operational phase, the sponsor is responsible for undertaking a formal review of whether the project benefits defined in the business case have been realised or not.
20
Q
What is the 8-stage process for successful change
A
- establish a sense of urgency
- create a guiding coalition
- develop a vision and strategy
- communicate change vision
- empower broad based action
- general short term wins
- consolidate gains and produce more change
- anchor new approached on the culture
21
Q
What is benefits management
A
The identification, definition, planning, tracking and realisation of business benefits
22
Q
Describe benefits management
A
- drives stakeholders perception of success
- by focusing on ‘what’s in it for men benefits can be developed which are specific to stakeholder groups
- drives effective organisation structure
- balancing change delivery against operational effectiveness
- effective transition management - anchoring capability in business as usual
- drives effective prioritisation of delivery
- influences delivery/implementation timescales to fit with operational needs - adds clarity to decision making
- effective change control driven by benefits delivery as well as time, cost and quality
- puts plan slippage in the context of business as usual
- puts a real value in enhancements/changes
- places a focus on risks to the realisation of benefits - focuses attention on embedded ‘business change’
- goes beyond the delivery of outputs and technical enablers alone
23
Q
What does success mean?
A
- meeting business objectives or benefits
- achieving customer or client satisfaction
- satisfying other stakeholders
- conformance to define requirements
24
Q
Define success criteria
A
The qualifications or quantitative measures by which the success of project, programme and portfolio management is judged.
25
What does successful benefits management depend on
- ensuring early agreement of benefits and strategic objectives of the organisation to in
- assign ownership of benefits and responsibility for their management
- use the benefits to provide a focus for project deliver
- understand what threats exist to the realisation of benefits and taking steps to mitigate these risks
26
Define requirements management
The process of capturing, assessing and justifying stakeholders wants and needs
27
What are the factors that contribute to successful requirements management
Scope;
The requirements form the basis of the projects scope. Having a good understanding of the business need will help define the most appropriate requirements as early as possible in the project life cycle
Estimating time and cost;
This will only be a worthwhile activity if the estimated relate to a well-informed set of clear requirements
Quality;
Without this understanding, the quality of each deliverable may be significantly undermined.
Change control;
Changes to the project scope will also have an obvious impact on the project requirements and part of the change control impact analysis should determine what effect and change has on the projects requirements, feature set and ultimately, its ability to satisfy the stated business need
Customer acceptance;
The customer is unlikely to accept the final deliverables if they do not meet their original requirement. One problem facing the project manager, however, is that the customer may have an unclear or changing perception of their requirements, and so poor or inadequate requirements must be viewed as a risk to the successful completion of the project.
28
What are the elements of requirements model
```
Business needs (why)
- multiple techniques might be used to elicit the users requirements including interviews, brainstorming, focus groups, prototype models, questionnaires and story-boarding l. Care just be taken to identify stakeholders true needs which might be quite different from what they are actually asking for.
```
Features (how)
- the business needs should not indicate a specific solution whereas the product feature will indeed define how this need will be satisfied
Requirements (what)
- requirements will help the project team understand exactly what is to be provided and forms the basis of the project scope. Requirements must be clearly defined, consistent, complete, traceable and verifiable
Acceptance criteria
- each requirement should have clearly defined acceptance criteria in order that there is no ambiguity as to whether the requirement has been satisfied or not.
29
What is the requirements management process
Capture;
Gathering, documenting and structuring the requirements. These are identified form many sources including the currently available project documentation and stakeholders. Other sources may include corporate goals, existing systems and their interfaces and subject matter experts
Analyse;
Analyse the requirements based on their ability to realise benefits whilst taking into account the business priorities, avaliability of resources, available a budgets etc. Also consider: requirements types (organising the requirements into e.g functional and non/functional requirements), testing (both functional and non-functional requirements must have specific assessment tests defined that will demonstrate their compliance. This will support customer acceptance by objectively demonstrating that the requirements have been met)
Justify
The requirements to distinguish wants from needs. This will result in appropriate prioritisation of the requirements and the justification of the investment by the project in meeting them.
Baseline
The requirements before deciding solutions and then creating requirements that are met by the solution!
30
Explain payback period
The payback period of a project refers to the time taken for the project financial returns to cancel out the initial project costs. Normally, the shorter the payback period; the more desirable the project, based on the fact that the money invested is at risk for a reduced period. It is a very simple technique that is often used as a quick ‘litmus test’ to determine whether a prod field should be considered at all.
This method limits risk to the organisation (a threshold for a maximum payback period may also be mandated). However, it is argued to be short-term as it ignored returns after the payback period.
31
How does the business case work as a working document
Preparing a business case required the summarisation and integration of information from all the fundamental components of scope, schedule, cost, risk, quality and resources.
Consequently, the business case is a living document that is constantly reference and used over the extended project life cycle.
-concept
-justification of investment in the initial
idea
-definition
-viability of the investment in light of the
detailed planning that has now been
undertaken
-development
-continued viability of the investment as
the deliverables are produced
-handover and closure
-evaluation of the project in terms of the
project objectives and success criteria
-operations
-have the benefits set out in the business
case actually been realised?
The sponsor is ultimately accountable for the successful running of the project and the realisation of benefits. For this reason, the business case is owned by the project sponsor but it is likely that additional input to its creation and/or maintenance will be provided by other project stakeholders including the project manager, subject matter experts, specialist estimators, suppliers, the project office, financial department. The work is these contributors will need to be coordinated and brought together under the overall direction of the project sponsor.
The sponsor needs to ensure that a planned logical process is out in place to integrate and deliver successful business change. It is really important that the sponsor, project manager and their team understand and buy into the business case.
The business case should answer these questions
- what are we doing and why?
- are the estimates robust, is it affordable?
- is it value for money -could I get it 80% of the benefit from the 50% costs?
- is it achievable from all perspectives - commercially/ppm set-up, governance, stakeholders, to timescale?
- how we planned to realise benefits?
32
Define Communication
he means by which information or instructions are exchanged. Successful communication occurs when the received meaning is the same as he transmitted meaning.
33
What are the requirements for effective communication?
- Stakeholder identification and analysis to establish and understand the needs of the target audience and manage the relationship
- A system for message delivery in order to ensure hat the appropriate message is provided to the appropriate stakeholder at the appropriate time in the project in line with plans.
- A system of monitoring and feedback to assess the effectiveness of the communication process
- The clarity of the message in order to ensure understanding and, in accordance with the governance of project management, to foster trust and commitment
34
What are the benefits of stakeholder engagement
- Increased support, Stakeholders who have a positive view on the project can prove to be valuable allies in negotiation and conflict situations
- Access to resources, project managers who actively manage stakeholder expectations have greater likelihood of gaining access to the key resources required to achieve the agreed project success criteria.
- Minimise resistance, reducing the level of negative interest in the project will allow the project manager to focus on factors that positively contribute to project delivery as opposed to worrying about negative distractions
- Deliverable acceptance, stakeholders who have been fully consulted during the definition and execution of the project are more likely to feel that their needs have been considered and therefore more readily accept deliverables.
- Enhance/maintain communication. A safe and trusting climate amongst the stakeholder community will help to foster open and timely communication leading to better decision making within the project.
- Improve quality, ensuring that key stakeholders are appropriately consulted will help to ensure that their needs are met and that project deliverables are indeed 'fit for purpose'
35
Describe document management
All project documentation needs to be organised in a way that will allow both an easy retrieval of information and an audit trail to be created. Therefore each document should include at least:
- Unique project identifier
- Unique document identifier and title
- Latest version number and date
- Person responsible for the document (owner)
- Record of past alterations
- Record of people who received copies of the document.
A typical document management process for review and approval of individual documents will include the following steps: Document Creation - Document Review - Document Approval - Document Release - Document update.
36
What are the characteristics of Information Quality
Accuracy - Data needs to sufficiently accurate for its intended use. The reliability of information provided will help to establish the credibility of the project team.
Relevance - Information must be applicable to the users' needs. The expected response to a communication will help to determine what level of information is required. Redundant information may cause the key message to be misunderstood.
Timeliness - Information must be up to date and available as and when required. This is essential if key project stakeholders are to make effective decisions in a timely manner. The project manager must consider how different versions of information are handled
Completeness - Information can be misrepresented if only partial data is provided. The level of detail required to make a decision must also be considered. Care must still be taken to ensure that the data is presented in a concise and understandable format. 3
37
What are the ways of distributing information
Interactive
- Multi-directional exchange of information
- Quickly establishes common understanding
- Meeting, conference calls etc.
Push
- Sent to specific stakeholders who need to know information
- Has information been received and/or understood?
- Emails, voicemails, letters etc.
Pull
- Used for large amounts of information
- Users access information at their own convenience
- Intranet, e-learning, project database etc.
38
Define Knowledge management
The systematic management of information and learning. It turns personal information and experience into collective knowledge that can be widely shared throughout an organisation and a profession.
They can be embedded in the culture of an organisation by such initiatives as:
- Creating a repository of case studies
- Holding Project Management forums
- Lessons learned workshops and sharing good practice
- Linking to an external knowledge network.
39
What are the critical success factors?
- Project mission - Clearly defined project goal(s) and direction (the goals should align with the agreed strategy)
- Top management support - Sponsor and/or senior management provide guidance and support necessary to achieve success criteria
- Project schedule and plan - Detailed and realistic plan and specification for the project
- Client consultation - early agreement on specification and plan (plus timely response to questions and requests for support and guidance)
- Personnel recruitment, training, and selection - Having the skills and competence required to undertake the project tasks
- Technical tasks - Having access to the necessary technology and other expertise
- Client acceptance - Willing adoption of the project deliverables by the end users
- Monitoring and feedback - Timely and accurate data that facilitates informed and effective decision-making
- Communication - Appropriate identification of stakeholders and effective communication within this group
- Trouble-shooting - Flexibility and ability to handle unexpected issues.
40
What does a Project File contain?
- Project management procedures for;
- Project Monitoring
- Change Control
- Project file distribution and updating
- Essential project data
- Plans
- Progress reports
- Meeting notes
You cannot avoid a project file. These days it can be electronic or paper-based. Records may have to be kept for some considerable time after project completion, as stipulated by legislation and/or the organisations information management policy.
41
What is a project diary
- Personal log book of information
- Meeting notes, action items, issues and problems
- Strictly chronological
- A single bound book
- Maintained by the project manager
An individuals personal written record may help settle disputes. It could put you in the driving seat compared with the other part (they may not have kept a project diary). The project manager should have one, team members/other project stakeholders may also keep project diaries.
42
outline the general guidelines of project meetings
Before
- Determine the purpose of the meeting
- Determine who really needs to be there
- Notify the participants (when, where, how long)
- Send out an agenda
During
- Specify the time limit on the agenda items
- Begin the meeting by specifying the objectives
- Gather input
- Keep things moving
- Summarise the discussion and any action and action owner at the end of each agenda item.
After
- Follow-up on individual agenda items with the action owner
- Distribute the minutes or meeting notes to participants
- Make the participants aware of the next meeting
43
What are effective meetings?
- Chaired effectively and are purposeful
- Kept to a previously issued agenda
- Recorded in brief minutes/notes of action and decisions
- Limited to a maximum duration and attended by the relevant people
44
Define business case
Provides justification for undertaking a project or programme. It evaluates the benefit, cost and risk of alternative options and provides a rationale for preferred solution.
45
Describe justification in a business case
The single most important document in any project, the business case defines 'why' a project is being undertaken by providing a justification for the investment in the project. The justification is typically supported by a comparison of the project's quantified costs and benefits.
46
What does the Business Case provide?
A clearly presented rationale for the investment, to gain management commitment and approval for investment in business change. It provides a framework for informed decision making in planning and management of the business change and subsequent benefits realisation.
47
What does project justification define?
Project justification defines and focuses on the business benefits and important stakeholder requirements that the project is undertaken in order to address.
Project managers and team members need to be aware of the justification for their project as it will provide them with the information they need to make day-to-day during their planning and delivery of the project.
48
What is the structure for a project business case?
Background
- Sometimes referred to as 'reasons'
- Where does this project fit in to the bigger picture?
- This section will also list the main objectives of the project
Options
- Alternative strategies should be investigated including the 'do nothing' option
- Assumptions used as a basis for any assessment should also be here
Benefits
- This section of the Business Case will identify and value the expected benefits in order to justify the project
- It should also contain information about any 'dis-benefits', i.e. adverse consequences of pursuing the investment in the project.
Commercial aspects
- High-level costs
- An investment appraisal should be performed and the results included in the Business Case
- Funding arrangements
Risks
- The major risks and overall risk levels will be covered in this section to the extent that they form part of the balance of justification
Timescales
- A summary of high level view of the likely timescales for the project.
49
What phase is the Business case in?
The business case is the key output of the project's Concept Phase and documents the initial idea as well as providing the information required to subsequently scope and plan the project in detail.
50
When and why is the business case revisited?
The business case is revisited throughout the project life cycle to confirm that the project is still a viable and worthwhile investment.
51
What can internally induced change be in response to?
- Ideas or pressure from staff
- The need for structural change within the organisation
- The need for a cultural change within the organisation
- Management change to improve cost or efficiency improvements, for example, by rationalising the number of sites in use or outsourcing tasks
52
What can externally induced change be in response to?
- Changes in the market place or competitor activity
- Changes or advances in technology
- Changes to legislation or from regulatory bodies
- Pressure from shareholders
- Pressure from stakeholder groups such as local residents, environmental or political groups
53
What is the 8-stage process for successful change?
- Establish a sense of urgency
- Create a guiding coalition
- Develop a guiding coalition
- Develop a vision and strategy
- Communicate change vision
- Empower broad based action
- Generate short term wins
- Consolidate gains and produce more change
- Anchor new approached in the culture
54
The delivery framework is underpinned by seven key perspectives - what are they?
- Management Control
- Benefits Management
- Finance Management
- Risk Management
- Stakeholder Management
- Organisational Governance
- Resource Management
55
What is benefits management?
The identification, definition, planning, tracking and realisation of business benefits.
56
What does benefits management do?
- Drives stakeholders' perceptions of success:
- By focusing on 'What's in it for me?' benefits can be
developed which are specific to stakeholder groups
- Drives effective organisation structures:
- Balancing change delivery against operational
effectiveness
- Effective transition management - anchoring
capability in business as usual
- Drives effective prioritisation of delivery:
- Influences delivery/implementation timescales to fit
with operational needs
- Adds clarity to decision making:
- Effective change control driven by benefits delivery
as well as time, cost and quality
- Puts plan slippage in the context of business as
usual
- Puts a real value on enhancements/changes
- Places a focus on risks to the realisation of benefits
- Focuses attention on embedded ' Business Change'
- Goes beyond the delivery of outputs and technical
enablers alone
57
What benefits can typically be seen as the expected positive results?
- Meeting a legal or policy requirement (mandatory)
- Service quality improvement
- Improved management processes
- Operational process improvement (efficiency or effectiveness)
- New or improved business outcomes (new products etc.)
- Better motivated, flexible workforce
- Reduced risks
- Business flexibility
- Better economy, reduced operations costs while maintaining quality
- Revenue enhancement or acceleration
- Better strategic fit
58
Define Benefits
The quantifiable and measurable improvement resulting from the completion of deliverables that is perceived as positive by a stakeholder. It will normally have a tangible value, expressed in monetary terms, that will justify the investment.
59
What is the Benefits Management Process
Define Benefits management plan
- The benefits management plan provides the
programme or project with a framework of realising
benefits. It sets out the 'rules of engagement' on how
to identify, map, monitor and review the benefits
management process.
Identify and structure benefits
- Identify the likely benefits and map them back to the
strategic objectives of the project. Benefits should be
categorised as quantitative or qualitative and
appropriate measured defined for each benefit.
Plan benefits realisation
- Plan how benefits will be achieved and measured -
this is often overlooked, yet is a key element in
ensuring that the project delivers those benefits for
which it was undertaken to provide. The output of this
step will be the Benefits realisation plan.
Implement the change
- As the project progresses, track, monitor and control
the progress towards achievement of the benefits.
Cost- Benefit analysis, assessment of the threats and
opportunities to the benefits and reviews of the
viability of the business case will all play an important
part in this.
Realise the Benefits
- The benefits review plan will define when to hold
formal reviews of whether the benefits have been
realised. The plan must also state how the measurement will be undertaken and who will be responsible for undertaking this exercise. Most benefits realisation reviews will typically be undertaken during the projects operation phase and will involve the project sponsor, who is ultimately accountable for the realisation of the benefits.
60
What factors is the success of benefits management dependant on?
- Ensure early agreement of benefits amongst the relevant project stakeholders
- Establish a clear link between project benefits and strategic objectives of the organisation
- Assign ownership of benefits and responsibility for their management
- Use the benefits to provide a focus for project delivery
- Understand what threats exist tot he realisation of benefits and taking steps to mitigate these risks.
61
What does success mean?
- Meeting business objectives or benefits
- Achieving customer or client satisfaction
- Satisfying other stakeholders
- Conformance to defined requirements
62
Define success criteria
The qualitative or quantitative measures by which the success of project, programme and portfolio management is judged.
63
Define Requirements management
The process of capturing, assessing and justifying stakeholders' wants and needs.
64
What are the areas linked to requirements management?
Scope: The requirements form the basis of the project's
scope. Having a goof understanding of the business
need will help define the most appropriate
requirements as early as possible in the project life
cycle.
Estimating time and cost: This will only be a worthwhile
activity if the estimates relate to a well-informed set of
clear requirements
Quality: Without this understanding, the quality of each
deliverable may be significantly undermined.
Change control: Changes to the project scope will also
have an obvious impact on the project requirements
and part of the change control impact analysis should
determine what effect any change has on the project's
requirements, feature set and ultimately, its ability to
satisfy the stated business need.
Customer acceptance: The customer is unlikely to
accept the final deliverables if they do no meet their
original requirements. One problem facing the project
manager, however, is that the customer may have an
unclear or changing perception of their requirements,
and so poor or inadequate requirements must be
views as a risk to the successful completion of the
project.
65
What are the elements of the Requirements Model?
Business Need (Why)
Multiple techniques might be used to elicit the users'
requirements including interviews, brainstorming,
focus groups, prototype models, questionnaires and
story- boarding. Care must be taken to identify
stakeholders' true needs which might be quite
different from what they are actually asking for.
Features (How)
The business need should not indicate a specific
solution whereas the product features will indeed
define how this need will be satisfied.
Requirements (What)
Requirements will help the project team understand
exactly what is to be provided and forms the basis of
the project scope. Requirements must be clearly
defined, consistent (with other requirements)
complete, traceable and verifiable
Acceptance Criteria
Each requirement should have clearly defined
acceptance criteria in order that there is no ambiguity
as to whether the requirement has been satisfied or
not.
66
What is the Requirements Management Process
Capture
- Gathering, documenting and structuring the
requirements. These are identified from many sources
including the currently available project
documentation and stakeholders. Other sources may
include corporate goals, existing systems and their
interfaces and subject matter experts.
Analyse
- Analyse the requirements based on their ability to
realise benefits whilst taking into account the business
priorities, availability of resources, available budget
etc. Also consider:
- Requirements type: Organising the requirements
into e.g. functional and non-functional requirements
- Testing: Both the functional and non-functional
requirements must have specific assessment tests
defined that will demonstrate their compliance. This
will support customer acceptance by objectively
demonstrating that the requirements have been
met.
Justify
- The requirements to distinguish wants from needs.
This will result in appropriate prioritisation of the
requirements and the justification of the investment
by the project in meeting them.
Baseline
- The requirements before considering the options for
meeting them. Beware of devising solutions and then
creating requirements that are met by the solution.
67
What are requirements structured around?
- Value: How large is the benefit associated with each requirement
- Priority: What do stakeholders feel are the most significant requirements
- Time: Business timescales will play a large part in determining the priority of requirements
- Process: How will the project team deliver the solution
68
Describe the Functional Requirement type
Functional requirements state exactly what a system should do in any given situation i.e. Inputs, outputs and behaviours of the system, Use cases and Business rules
69
Describe the Non-functional Requirement type
Non-functional requirements specify the attributes that the system must possess. Sometimes these requirements are known as quality attributes i.e. Usability, reliability, performance, supportability, security
70
How should the requirements be recorded in a way that the project team and stakeholders clearly understand what is needed
- A clear statement of the problem or opportunity - any
ambiguity must be removed as this serves no purpose
and only clouds the issues and understanding of what
must be delivered.
- Developed in conjunction with all key stakeholders -
understanding the respective needs, wants and
expectations of the different stakeholders assists in
enhancing the understanding of the deliverable
amongst the stakeholders.
- Descriptive not prescriptive requirements - as far as
possible the requirements need to be described with
little emphasis placed on how the deliverable is to be
provided.
- Including an understanding of the high level risks at
this stage of the project.
- Taking into account the project context
- Including measurable project success criteria - time,
cost and quality/performance as a minimum
71
What are the Types of Costs?
Fixed
- Remain the same over a given period of time
irrespective of output/production changes, e.g. rent
- The rent and rates of a factory will stay the same
whether the business is booming or slack, whether
production is high or low
- Note that this is only true for a given range or activity
- e.g. if production goes up say threefold and the
company has to acquire a new factory, then a new
figure will apple as FIXED.
Variable
- Refers to a constant amount per unit of
output/production e.g. changes in proportion to the
volume of output: materials used in production
- Here, the relationship between output and material
costs is directly proportional, unless, volume
changes to provide economies of scale such as e.g.
bulk purchase discounts etc.
Semi-variable
- These costs comprise a fixed standing charge and a variable usage charge: For Example:
- Two part tariff such as telephone, machinery hire,
photocopiers in an office environment
- Hire charge and cost of operation
Direct
- When a cost can be easily associated with a particular
product, service or activity e.g. cost of materials and
labour in a manufacturing environment
Indirect
- Those costs which cannot conveniently be associated
with a particular product or service e.g. Factory rent
and rates in a multi-product factory
Discretionary
- These costs are those where you have a choice
regarding the spend:
- Advertising, training, research
- Long term gains vs. Short term spend
- Do not change in line with production
- Fixed and often direct
- Can be increased or decreased as a result of
management decisions
- Often at short notice.
Committed
- Costs which will have to be paid irrespective of project
go/no go decision e.g.
- Fixed costs such as vehicles, fixtures and fittings,
property
Sunk
- Costs which have already been incurred and will not
be recovered as a result of any decision now being
taken e.g.
- Pre-purchase of IT equipment
- Long lead project items
Opportunity Costs
- Definition - 'the benefit foregone by not entering into
the best alternative activity' or 'the value of the next
best alternative'
- The simplest example is the interest lost when
investing money in projects
- Often a feature of investment appraisal
- Can be drastically affected by estimating
assumptions such as interest rates, revenue
predictions
72
Describe the types of costing
Standard
- The amount of materials and labour required to
produce one unit
- Needs accurate, historical data
- Variances for materials and labour are used to monitor
efficiency of resource usage
- Wastage, quality control
- Downtime, utilisation, overtime
- Overheads?
Material variances will occur where materials are bought at a higher rate than standard or where more has been used when compared to standard
Labour variances will occur where say a higher rate has been paid when compared to standard or where more has been paid to produce the same number of units.
Absorption
- Overheads are apportioned to each unit produced (in addition to material and labour)
- The cost of the unit 'absorbs' overhead costs for profit identification purposes
Activity-Based (ABC)
- Method for allocating overhead costs to each 'activity'
- Different product lines within a manufacturing concern
- Costs allocated to cost centre or business unit
- Costs further allocated to each product.
Some reasons for using ABC are:
- Seeks to address the problem of inequitable overhead
absorption
- Consequential dangers of under-pricing or over-pricing
of different product lines
- Identifies ' cost drivers' within a business
- Links products to overheads.
73
What is Through-life costing?
What are the Issues with it?
What are the advantages and disadvantages?
- Addresses the cost of ownership for the entire life of a product
- Appropriate if an organisation is responsible for the product from 'cradle to grave'
- Looks at more than just acquisition costs
- In-service/operation costs dominate
- Allows the costs of decommissioning/disposal to be set aside
Issues
- Involvement of the in-service support community at the start of the project (integrated logistic support)
- Spares holding (just-in-time)
- Financial scrutiny is concentrated on the first few years
- Priorities are focused on acquisition and handover
- When to upgrade/improve specification/update?
- Keeping the initial TLC prediction live
- Estimates are less reliable at later stages in the product life cycle
Advantages
- Yields best estimate for cost of ownership
- Can be used to help new acquisition decisions
- Fully informs senior management (strategy)
- Can influence the design process
Disadvantages
- Only as good as the estimate
- Requires buy-in from all stakeholders
- Effort is focused on early stages of the project life cycle
- Required investment of time and effort
74
Why should you appraise?
- Capital is not free
- Capital/Cash is a scarce resource
- Rate of return in organisations must be higher than what can be obtained elsewhere
- Helps to assess the viability of several projects and choose between them if necessary
- Links projects to the business
- Because you have to!
75
what are the 4 points of Benefit Measurement Methods
- Benefit - Cost analysis
- Value Management/Value Engineering
- Weighted Analysis
- Economic Models/Investment Analysis
76
Outline Benefit - Cost Analysis
Is performed to validate that the project will provide sufficient return against the financial investment to make it worthwhile.
The ration is known as the 'Benefit Cost Ratio' a value greater than one indicating a profitable project, a ration of one indicating a break even project, and a ration of less than one indicating a loss making project.
This can be express as a ration:
B/C Ratio >1 :- value of benefits are greater than costs
B/C Ratio =1 :- value of benefits are equivalent to costs
B/C Ratio <1 :- value of benefits are less than costs
77
Outline Value Management/Value Engineering
Creative approach used to optimise project life cycle costs, save time, increase profits, improve quality, expand market share, solve problems and/or use resources more effectively.
It is a multi-disciplinary team approach that is normally directed at achieving at least the required level of performance but at a reduced cost.
The concept of Value is a ration:
'Satisfaction of Needs' (monetary and non-monetary)
-----------------------------------------------------------------------------
'Use of resources' (People, money, time, energy, materials)
78
Outline Weighted Analysis
Team-based decision making tool where the multidisciplinary team collectively agrees on the factors that should impact on the selection process, and decide upon an appropriate 'weighting' or importance rating for each of the agreed factors.
The group then score each option against each factor where a score of 1 represents the worse possible performance and a score of 10 represent perfection. You then multiply each score by its weighting factor and add all the scores together for each option, the option with the highest score wins.
It is a generic decision making tool which could be applied to project selection, project option selection or vendor selection during procurement.
79
Economic Models/Investment Analysis
- Depreciation (the assessment of the change in value, through use, of an asset. This is important for valuing the fixed assets of an organisation in order to gauge its overall worth, and the results of the assessment are entered into the organisation's profit and loss statement'
- Payback
- Return on Investment/Accounting Rate of Return
- Net Present Value and Internal Rate of Return
80
Outline Payback Period
Refers to the time taken for the project financial returns to cancel out the initial project costs. Normally, the shorter the payback period, the more desirable the project, based on the fact that the money invested is at risk for a reduced period. It is a very simple technique that is often used as a quick 'litmus test' to determine whether a project should be considered at all.
This method limits risk to the organisation. However, it is argued to be short-term as it ignores returns after the payback period.
81
Outline Return on Investment/Accounting Rate of Return
Return on investment is a comparison of the total financial return from a project against the initial investment required. It is normally expressed as a percentage of the initial investment, with a positive value indicating a profitable project.
The advantage of this technique compared to payback is that it does use all of the forecast financial data available to assist in the decision. It allows comparison of different size projects but it does not account for the timing of the returns.
It is necessary to consider the whole lifetime of the investment and the returns for each year. These returns are totalled and expressed as a yearly average by dividing by the number of years of the investment's life.
82
Outline Discounted Cash Flow
A major drawback of the Payback Period and Accounting Rate of Return methods is that they assume that the value, or 'Spending power' of money remains constant over time: that £100 this year has the same spending power of £100 in, say, seven years; time. We know, however, that due to fluctuations in such parameters as the inflation rate, the 'spending power' of money does indeed vary (and usually reduces) over time.
83
Outline Net Present Value
Net present value attempts to make an allowance for this concept of the time value of money by multiplying any future forecasts of income or expenditure by a correction factor, known as the discount rate. These adjusted forecasts are then summed and compared against the project investment required, a positive remainder indicating a profitable project.
The discount rate used in the calculation is set by the client organisation and would normally be linked tot he cost of borrowing, plus maybe a few extra percentage points to reflect the inherent risks associated with projects.
84
Internal Rate of Return
The internal rate of return is a variation on the previous technique of calculating net present value which also takes into account discounted cash flow. Rather than calculating NPV values at various discount rates for comparison of performances, the IRR represents the discount rate at which the NPV equals zero, in other words the break even discount rate. This gives a single value for any project, normally the higher the positive value, the more profitable the project would be. It can be directly compared to the cost of borrowing money to help decide on feasibility. IRR is very good for looking at the sensitivity of an investment and the impact of fluctuations in economic factors. It can yield multiple values if cash-flows during project are uneven.
85
What are the advantages and disadvantages of simple payback
Advantages
- Simple to calculate
- Easy to understand
- Can be discounted if required
Disadvantages
- Cashflows after payback period are ignored
- Does not normally take into account the time value of money
- Does not take into account profitability over the life of the project
86
What are the advantages and disadvantages of accounting rate of return
Advantages
- Yields a percentage figure for comparison between project or options
- Can be discounted. Does not need cash flow timing to calculate
- Draws upon all financial data
Disadvantages
- Does not normally take into account the time value of money
- Does not yield a single figure for profitability
- Yields an average- does not allow for timing.
87
What are the advantages and disadvantages of Net present value
Advantages
- Takes into account the time value of money
- It expresses all future cash flows in today's values, which enables direct comparison of option
- Allows for inflation and escalation
- Looks at whole project
- Yields a single figure for profitability
Disadvantages
- More complex to calculate
- Heavily reliant on an accurate selection of the discount rate to be employed.
88
What are the advantages and disadvantages of Internal Rate of Return
Advantages
- Takes into account the time value of money
- No discount factor required in the result (but is required for the calculation)
- Can directly compare with the cost of capital
Disadvantages
- Complex, difficult to do without a spreadsheet
- IRR can yield negative or multiple solutions, for non-standard cash flows.
89
What questions should the business case answer?
- What are we doing and why?
- Are the estimates robust, and is it affordable?
- Is it value for money - could I get 80% of the benefit from 50% of the cost?
- Is it achievable from all perspectives - commercially/PPM set-up, governance, stakeholders, to timescale?
- Have we planned to realise benefits?
90
What are the Project Managers Actions in relation to the Business Case
- Draft the Business Case for the Sponsor (if delegated)
- Prepare the project plans to fulfil the Business Case and enable the intended return on the investment in the beneficial change
- Review and update the Business Case at the end of each project Phase or stage
- Review and report on the performance of the project in relation to the Business Case at the end of the project.
91
What are the common issues with Business Cases
Options analysis
- It is not enough to say that ' the Senior Director or
Manager) has committed to this'. What are the
problems you are trying to solve?
- There may be an option which can deliver most of the
benefit for less cost, or further analysis may identify a
better option which Senior Directors or Managers
would prefer.
Stakeholders
- You need their informed sign-up - what do they have to
do to implement - what else are they doing at the same
time - impact on business as usual - costs falling to
them
People and skills
- What do you need to deliver? Where are they coming
from?
Strategic portfolio fit - and dependencies
- You need to keep scanning the environment for any
changes which impact on your project - are you still
doing the right thing in the right way?
- Are you clear what you are delivering and how?
- Do you have the support you need to challenge and
direct the work?
Timescales
- Should be challenging but realistic - not just plucked
from the air, or from aspirations, and then missed by
miles - its better to be realistic from the start
- Also when is it appropriate to deliver this change -
consider impact on Business as Usual or availability of
scarce internal resources
