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A blog that looks at all aspects of project and program finances from budgets and accounting to getting a pay rise and managing contracts.

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Thoughts on Benefits Realization Management [and Book Review]

3 Reasons Why Your Project Budget is Overspent (and what you can do about it)

Want to learn from Europe’s largest construction project?

Common Financial Appraisal Techniques [Infographic]

5 Places To Look for Project Suppliers

Thoughts on Benefits Realization Management [and Book Review]

Categories: benefits

Quote

I’ve been thinking a lot about benefits recently. It was the feature of a week of discussion questions in my Facebook group, and I’m leaning more and more towards benefits being something that the project manager has to get involved with. This idea that we deliver the outputs and then the permanent organisation magics up the benefits is feeling more and more like old style thinking.

So I was delighted to get a copy of Benefits Realization Management: Strategic Value from Portfolios, Programs and Projects, from Carlos Eduardo Martins Serra even though I was a bit daunted by the length of it.

I shouldn’t have worried.

Despite looking pretty boring on the outside (I was holding it with the title obscured and a colleague said he thought it looked like a modern-day book about religion), inside is hugely practical.

Every few pages it feels like there is a table or diagram succinctly explaining a concept. Here's my interpretation of how to close the value gap by using benefits to jump you to where you need to be.

There are templates galore when you get later in the book. There’s a giant appendix on how to use the guidance, which means that what you read about you can actually do something with. The whole thing has been designed to be intensely useful. The templates are repeated in another appendix (with chapter references) so you don’t have to keep flicking back and forward or marking the pages to find the one you want.

The book starts with the ‘strategic alignment’ angle that is so crucial to project management right now, but quickly moves into a discussion of project success and how value is created in the business. That’s all tied back to benefits.

Part 2 is where you start to get into the author’s model for the management of benefits. The Enterprise Benefits Realisation Management process is explained simply. I liked the fact that there is adequate focus on the people responsible for benefits realisation: for all I said at the beginning about project managers taking a more active role in benefits, I’m aware that we can’t (and shouldn’t) do it all.

Essentially this part is a flexible framework for translating business strategy drivers into benefits and then planning how to get them and making it happen. This is a huge part of project governance – we don’t do projects for fun, we do them to get the benefits!

The book also includes a couple of case studies: a few more might have been nice but to be honest I was reading it more interested in what I could do in my projects rather than much caring about what other people did. Your own context is always more valuable, I think, when the guidance is so clear about how to implement benefits realisation management that I was always thinking about what it meant for me.

The exception to that is the worked example in Appendix C which is a (fake) case study but it takes you through all the relevant templates as they would be completed for that organisation. This is helpful because you can see what is supposed to go into each section and plan what you are going to say for your projects.

Each chapter ends with review questions. I didn’t think these added much. If you are a student and want to check your understanding, great – do them. The answers are at the back so you can check your work. But if you are a professional, reading it because you want to do benefits realisation more effectively in your organisations, then I doubt you’ll spend much more time on these than a cursory glance as you turn the page.

In summary, I enjoyed it more than I expected and I think it will become a desk reference for me on how to manage project benefits. Recommended.

Benefits Realization Management is published by CRC Press.

Posted on: March 23, 2017 07:59 AM | Permalink | Comments (6)

3 Reasons Why Your Project Budget is Overspent (and what you can do about it)

Categories: budget, video

In this video I look at 3 common reasons for going over budget, and point out some quick things you can do to put them right.

Posted on: March 16, 2017 08:59 AM | Permalink | Comments (5)

Want to learn from Europe’s largest construction project?

Categories: case study

Copyright Crossrail Ltd

Platform construction at Liverpool Street station completes © Crossrail Ltd.

Infrastructure projects in the UK don’t always get good press, but that is starting to change. Crossrail, in particular, is spoken of in very high terms. At a training event I attended recently, one of the delegates was from the Crossrail team. She spent most of her time in a hardhat and overalls and getting out of the tunnels for the course seemed almost a novelty. The trainer called on her several times to explain to the group the ‘Crossrail way’.

And why not? Crossrail is delivering and making real change in London and going about it with good grace and excellent stakeholder relations from what I can tell.

Crossrail is the UK’s largest project for a generation. It’s a comprehensive programme of tunneling, station construction, railway and infrastructure work that affects 40 sites in London. It’s burning through £140m per month and it’s doing amazing things.

The programme, inspired by the learning legacy work done after the London Olympics, I imagine, has set up a comprehensive lessons learned site with a large section on project management.

The project and programme section covers:

  • Project initiation and development
  • Delivery and execution strategy
  • Handover and transition (I shall definitely be browsing this area)
  • Programme controls
  • Audit and assurance
  • Quality
  • Sustainability strategy

So there is a lot covered, across a range of project and programme management disciplines and functional areas.

They are sharing how the work is done in minute detail. For example, you can download the change control and budget management procedure, along with a change control form. Then you can learn from how they have made those documents work for them and you benefit from all that expertise when you put your own together.

There are also documents that outline how Crossrail approached Earned Value and their estimating approaches. In fact, there are documents that cover pretty much everything.

The Documentation

Within the learning legacy document archives you’ll find a number of different file types.

Good practice documents are templates, processes and similar that have been shared for you to use (or modify). Note that they don’t talk about best practice.

There are micro-reports which are website pages (not documents to download although they might link to them) that focus on a short point.

There are case studies which include lessons learned and recommendations for future projects and programmes.

Technical papers take a topic and go in-depth. These are also peer-reviewed so you know you are getting a good quality, accurate document.

Finally, there are research summaries, which are shorter versions of research carried out by academics studying Crossrail – yes, universities are picking over what is happening there as well as practitioners.

The Value

I don’t work in construction, so some of the findings are less useful to me. However, if you do have a construction element to your projects, there is definitely value in finding out how other people ran projects – both the good and the not so good.

If you are preparing a business case or proposal you could also find some value here: many stakeholders and decision makers like statistics, so throwing in some research to show that you have taken on board learnings from other large programmes could well add weight to your arguments. Worth a try, eh?

My Key Takeaways

There is a huge focus on sustainability, and a lot of effort has gone into the legacy element of the project. It’s so important that a development like this is managed holistically over time and with consideration for the environment in all its forms around the build sites. There are documents in the learning legacy archive setting out how that focus has been achieved, which make interesting reading.

Finally, the overarching message of Crossrail is that it is about more than just the project management. If you have the time, browse the section on Talent and Resources as this covers their approach to managing the people side of this huge initiative.

I’m particularly impressed with how they have grown their own skills – knowing that skilled engineering resource is somewhat lacking, and wanting to make a difference to the local community as a legacy from the construction, they have embraced all the different ways to develop talent. From apprenticeship schemes to work with school children promoting STEM as a career choice, to creating an Academy to teach the tunneling and construction skills required, they’ve done a lot to ensure a pipeline of appropriate resources.

Your project might not have the budget (or the duration) to train young people in the skills you will need in 5 years’ time, but there are bound to be some key pointers here that you can take and implement on your own project initiatives.

Posted on: March 09, 2017 05:59 AM | Permalink | Comments (9)

Common Financial Appraisal Techniques [Infographic]

Categories: business case

Common Financial Appraisal techniques

I put this infographic together for you to highlight the common types of ways that project leaders and project financial analysts can carry out financial appraisals. These are all techniques that you can use in a business case or project proposal. I hope it's helpful!

The content of the image is drawn from Carlos Serra's book, Benefits Realization Management.

Posted on: March 01, 2017 11:59 AM | Permalink | Comments (8)

5 Places To Look for Project Suppliers

Categories: supplier management

If I want to buy something, I end up browsing Amazon first. I might end up purchasing from somewhere else, but I tend to use Amazon as my shop window.

You can’t do that with project procurement. I can’t search for ‘buy ERP system’ or hunt around in Amazon for a data center hosting package that meets the needs of my software firm.

So where do you go to look for suppliers?

First let’s talk about why a Google search isn’t your best bet. Some companies don’t have the budget to rank continually in the top search engine results. Some companies wouldn’t necessarily want or need to. Searching online is always a good starting point but shouldn’t be your only way of sourcing potential suppliers.

Here are 5 other places that you can look.

1. Your Current Pool of Suppliers

You already work with suppliers – I’m sure of it.

Can any of these offer the products or services that you want for your new project? You don’t have to go back to the start and source a brand new supplier for every project if you have one contracted already who can do the job.

Using a current supplier is normally faster than having to go through a lengthy procurement cycle. They know you and your business so there’s less time getting them up to speed on your requirements.

However, if you aren’t happy with the service you are getting from them, then obviously think twice before giving them more work.

2. Trade Fairs

There is a world of trade and industry exhibitions that let you meet suppliers in real life before signing a deal with them. This is a good option if you have done some online or desk research and you want to move to the next level before finalising an offer.

Plus, entrance to many shows and exhibitions is free.

They can be hugely timewasting if you don’t have a list of target companies to go and see, so do your research before you arrive and head for the trade stalls where you think you’ll get the most value.

3. Industry Press

Look for who is advertising in your industry press (online or a print magazine). Look for who is putting flyers in the magazines that come from your professional bodies. These are potential vendors, and they are actively targeting customers in your area.

I’ve not come across an industry yet that doesn’t have awards, so reading up about the winners of these awards can also give you an insight into who are the movers and shakers in your target industry. Awards normally include neat case studies of what the company has achieved so you can see how they work with others and do what they do.

4. People Your Suppliers Use

If you have trusted suppliers, ask them who they use to fulfil their needs in a similar space and see if there are any connections there that would also work for you.

Often, the same companies come up time and time again because they are tried and tested. Your current vendors may well be willing to recommend people who are not competitors to themselves but who would complement the services they offer.

5. Word of mouth

Alongside asking your vendors, ask other people for recommendations. Ask your clients. Ask your colleagues. Ask your network on LinkedIn or here at ProjectManagement.com in the forums. People love to share stories.

Also, discreetly, ask for information on vendors whom they would avoid. This can be harder to find out but it is infinitely more valuable, as long as you trust the source.

These 5 sources of potential vendors will hopefully give you a list to choose from. You can then take that list and turn it into a shortlist for you to do a deep dive. Start your procurement activity from here – and you are no longer wondering who to invite to tender for your project work.

Posted on: February 21, 2017 11:59 PM | Permalink | Comments (3)
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