Project Management

Green Belt Benchmarking

From the Benchmarking, Investment Analysis and Front-End Planning Blog
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My blog is part of my passion for professional developmentā€”of myself and others. My areas of project management experience and expertise are benchmarking, investment analysis and front-end planning, and my blog will covers these subject in a series of posts.

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What is a Green Belt, a qualification in Six Sigma, Continuous Improvement (CI) - someone told me it is really a white belt and you have had a roll in the grass.

Where does benchmarking fit in, well it does in three places;  firstly in the definition of a problem - a reference for improvement; secondly in identifying solution for a problem and thirdly in tracking improvements by comparing and sharing.

My story of my green belt project as a Commercial Manager in a Corporate IT function - responsible for overall budgeting and forecasting, quarterly and annual.  The problem was that forecasts were inaccurate and normally over -  the errors in quarterly forecast ranged from 30-70% out, normally underspend and the range of full year forecast up to 15% out, also normally underspend.  The impact was lost opportunity to reassign funds and significant management and direct report time in investigating and explaining variances.

I reviewed the process and identified and number of improvements - recognising one root cause was budgeting and forecasting behaviour by leaders and another the quality and consistency of the financial data.

The agreed approach was one of ‘No surprises’ with portfolio forecasting accuracy demanded at +/- 3%. This required 

1. Leadership engagement  and ownership ; transparent financials, deliverables and status.

2, Portfolio judgement ; Project contingencies and assumptions around scheduling and business engagement made transparent at the portfolio level

3. Feedback on forecasting performance ; understanding root causes of defects.

4. Single point of truth and source for data ; with consistency and thoroughness provided by the person involved.

The improvements required more leadership attention to forecasting activity and resulting spend and honesty in bidding for budget against requirements.  This was coupled with accurate tracking and reporting against a control chart.

By benchmarking across the teams with control charts over time it became apparent some groups were better than others.  There were two leaders who were at the centre of this result; both very effective and charismatic IT directors.

The story is of a leadership meeting and the moment that the different behaviours came to the fore.  One IT directors approach was to micromanage the costs and he achieved almost too good result well within the 3% target,  The other IT directors approach was to play the game but still budget with a reserve up his sleeve which came home to roost towards the end of the forecasting year.  These were extremes in the response and I remember the moment these came face to face in the leadership meeting,   After a moment of tension, in an environment of trust - there was realisation and it was agreed that the next round of forecasts would be tempered to allow some flexibility but with clarity and with a significant challenge to one IT director to really change his budgeting approach.

Benchmarking in the context of a Continuous Improvement (CI) green belt /six sigma project helped create the solution and also supported the sharing, learning and the environment of trust as part of cementing the improvements.

Posted on: March 01, 2020 12:40 PM | Permalink

Comments (4)

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Thanks for sharing.

Thanks for sharing.

Thanks, Tim,
Very good
Another approach is to review quarterly, with increased precision

Thank you so much all for your feedback.
Vincent, good spot re reviewing quarterly - we did focus on quarterly forecasting and tracked that in our control chart against our 3% target.

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