The Money Files

In this video I explain why project managers should be commercially aware.

The APM have recently produced a research paper about what makes projects successful, called The Conditions for Project Success.

The 12 factors that “provide a framework for project success” are not likely to be things that come as a surprise:

1. Effective governance
2. Goals and objectives
3. Commitment to project success
4. Capable sponsors
5. Secure funding
6. Project planning and review
7. Supportive organisations
8. End users and operators
9. Competent project teams
10. Aligned supply chain
11. Proven methods and tools
12. Appropriate standards

The bit that is most interesting in the context of this blog is how those factors map to successfully delivering on your project budget.

What makes for a successful project budget?

The research report looks at how strongly each of these success factors map to common measures of success such as time, quality, stakeholder satisfaction and then a general measure of success across the board. The budget one relates to “delivery to budget” so I take from that whether or not the project was completed without exceeding the budget.

The top six success factors which influence your ability to hit your budget targets are:

Planning and project review

This was in the top three for all success measures, which makes a lot of sense. This area covers progress monitoring, good scheduling, a flexible approach backed up by risk management and a sensible approach to managing change, good project initiation and an approach to lessons learned.

Effective governance

This was another factor that correlated strongly to project success across all the measures. You can’t monitor and control your spending unless you have clear governance in place. And more than clear governance: it needs to be effective at keeping that spending under control.

Goals and objectives

Unsurprisingly, this was the third success factor that mapped widely across all areas.

Proven methods

Related to the budget measure specifically, proven methods (i.e. “best practice” techniques) has the same statistical influence as goals and objectives and the next one…

Supportive organisations

This relates to whether the culture, structure and environment are set up to be conducive to project success. The example given in the research document is that trade unions are supportive of the project.

Competent project teams

As you’d expect, having project managers and team members who know what they are doing and are capable of carrying out their roles without making stupid mistakes is pretty important.

Commitment to project success

This relates to everyone involved believing that the project is achievable. In other words, making sure everyone is aligned to the vision and that the vision is not ridiculous. This has to flow across all the team members from the sponsor to suppliers and any other third parties involved.

The least important success factors

The three success factors deemed statistically the least important to being able to deliver to budget are:

• Aligned supply chain
• Capable sponsors
• Appropriate standards

What about funding?

Surprisingly, secure funding as a success factor comes in at number nine. It’s not in the bottom three, but it isn’t in the top six either. I thought that was odd: surely secure funding is a pre-requisite for hitting your budget?

I suppose, on thinking about it, that it isn’t. If your funding isn’t properly in place then you don’t have a budget to hit.

Subsidiary success factors

The survey also looked at subsidary success factors: those that aren’t considered the main ones (the 12 mentioned above) but that are still statisically significant when you look at their contribution to project success. I should probably add at this point that it was a survey, so these are respondent-reported outcomes rather than an independent expert analysing project data and assigning success factors and measures objectively.

The three subsidiary success factors that correlate with delivery to budget are:

1. The project has realistic time schedules
2. Tight control of budgets is in place to ensure that the value of available funding is maximised
3. The project has active risk management.

Again, none of this stuff is rocket science. If making sure that your project delivers within the budget you have agreed, then you need to make sure you have enough time to do it, manage your money well and mitigate risk in a sensible way.

Do these results about project success factors and their impact on whether or not you can deliver to budget come as a surprise to you? Let us know in the comments.

About the survey: The study was done by asking 25 leading project management professionals to come up with an initial framework for success factors and then checking it out with 862 practitioners. You can read more about it on the APM website and the whole report from BMG is available as a PDF download here.

Looking for something to read over the summer? I’ve picked six of my top choices from this blog and one bonus review so that you can choose the right book to improve your projects over the summer holidays.

Most  of them are available as ebooks so you don’t need to worry about weighing your suitcase down!

Value Management: Translating Aspirations into Performance

Roger H. Davies and Adam J. Davies

This book will help you answer questions from the executive group about how projects are adding value to the bottom line. They define value as ‘outcomes minus inputs’ so it’s a broad-ranging approach to working out how you are contributing, and applicable whatever ‘value’ means to you and your stakeholders.

It’s not an easy read but there are plenty of anecdotes, tables and graphs that explain the core concepts and help you get the most out of every project and programme that you do.

Read the full review here.

Business Case Essentials: A Guide to Structure and Content

Marty J. Schmidt

This is another of my favourites (I know, I have a lot!) because it is so practical. If you are preparing a project business case for the first time then this will really help you get your ideas clear and your figures in order.

Read the full review here.

Math for Grown-Ups

Laura Laing

I read this a long time ago but it’s still one of my all-time favourite books. I did OK at Maths (as we call it over here) at school but only because I really worked at it. It never came naturally to me.

As project managers we need to be confident dealing with numbers because they are everywhere: estimates, schedule variances, earned value, the budget, risk assessments – lots of project management techniques involve processing data and crunching it until the numbers look right. This book will help build your confidence and learn what ‘looks right’ and how to handle things if they don’t.

Read the full review here.

Tame, Messy and Wicked Risk Leadership

David Hancock

Hancock explains that the equation risk = likelihood x consequence only works when the risk is as a result of a knowledge gap and you can easily plug it. That isn’t the case in real life, where most risks are complex and you can’t easily control exactly what the outcome will be, even if you work meticulously through your risk management plan.

If you work on large or complex projects this will help you take risk management to the next level.

Read the full review here.

Make Every Second Count:Time Management Tips and Techniques for More Success with Less Stress

Robert R. Bly

Struggling to fit everything in to your working day? The strategies in here will help you get a grip on the time available and deal with your To Do list in a more productive way.

Essentially, he asks: “Do you want to be productive?” If you do, then get on and do the work. As a professional project manager you might not find any brand new tools in here, but you will get a dose of motivation to not complain that you can’t get anything done when in reality you surf the internet for a few hours a day.

Read the full review here.

Get-It-Done Guy’s 9 Steps to Work Less and Do More

Stever Robbins

This is another great book about time management (and if I had to choose between the previous book and this one, I’d go for this one although they both have their merits). In fact, I still get the email updates I subscribed to when I first read this book, and I unsubscribe from a lot of things.

I like the style of this book so if you are looking for something that isn’t dry reading and that still offers you practical tips for eking out a few more hours in the day, this is it.

If I remember rightly, there might even be zombies.

Read the full review here.

The Power of Project Leadership

Susanne Madsen

Finally, here’s a book about soft skills that is not at all soft in nature. This leadership primer from Susanne Madsen will have you reaching for a notebook and pen to make copious lists about what you can be doing differently to drive success on your projects.

I think many guides about leadership talk about it in an abstract way. This is a concrete look at what ‘doing leadership’ actually means, with exercises and tools to help you on the way – things you can implement tomorrow, if you wanted.

Read the full review here.

What will you be packing or reading over the summer? Let us know in the comments.

I’ve spent a lot of time going through the PwC Global PPM Survey recently and there are lots of things in there that project managers can take away. The most important message – and this won’t come as a surprise – is that “the PM community needs to brush up on the basics.”

They give some statistics to support that:

• Almost 40% of project managers do not believe there is clear accountability within a programme to make decisions and enable delivery.
• Almost a third of project managers do not have schedules that align both programmes and projects i.e. the programme level schedule does not integrate with the project schedules.
• Risk and issue management is not being carried out effectively. Only 77% of issues are managed “in a timely manner” and only 72% of project managers report that risk management is carried out through the life of the programme.

That last statistic troubles me, because risk management is not a one-off activity. You can’t set up a risk log (on my other blog I have a free risk register template) and expect it to manage itself or expect the project’s environment to remain static to the point that no other risks manifest themselves during the life cycle. Risk management has to be a regular, ongoing activity.

Getting the project management basics right

The survey says:

“PMs can improve their performance in getting the basics right and help Executive Teams deliver programmes of change. Many of the improvements that can be made are basic PPM processes and should be part and parcel of every programme but are frequently not done well or are not done consistently.”

This is what I consider the basics.

First, set your objectives. Have a clear goal and a line of sight to that goal. Everything is easier when you have total clarity about what you are trying to achieve because every decision you make supports the journey to get there. (It also makes it easier to do point 3 below.)

Second, regularly measure progress. Apparently this is not always done in all programmes, although why you would invest in a programme of work and then not bother to check anyone is actually working on it is beyond me.

Third, have a process to manage changes. According to PwC’s maturity assessments, almost half of programmes don’t have established processes for managing change.

Fourth, build in time to reflect. You can’t do a good job when you and the team are stressed and under pressure. You need a moment to catch your breath, consider alternative solutions, work out what’s round the corner (be it positive or negative) and review lessons learned so you don’t make the same mistakes over and over again.

Fifth, manage your risks. Risks that aren’t managed cost you money. Risks that aren’t exploited miss you opportunities. Everyone needs a Plan B because you can never be too prepared, especially when you have a lot of time and money tied up in delivering transformational change.

All of these are basics, but they don’t need to be unwieldy or fully documented to be done well. The most important thing is talking about them. As the survey authors write:

“Whilst reviewing a risk register or ensuring a benefits tracker is up to date need to happen, what is most important is that the conversation around a particular risk is had with the right people to drive mitigating action.”

What other project management practices do you consider to be ‘the basics?’ Let me know in the comments below.

I really liked what Carlos Serra had to say at last month’s PMI Global Congress EMEA about managing the project management benefits processes and I have a few more titbits from his presentation to share with you today.

One of the things I find the hardest about project management methods is that often they specify what to do without actually giving you practical steps for how to do it. Stakeholder management falls into that category (and is one of the reasons I wrote my book, Customer-Centric Project Management). Benefits management is another. I think benefits management is so hard to codify because project managers don’t really know if it falls to them or the senior managers or operational teams or someone else, so it disappears through the cracks and isn’t given the attention it deserves.

Hopefully these bits of advice will help address that.

Tools for benefits realisation management

What practical tools have you got at your disposal for benefits realisation and managing those processes? Carlos discussed several:

• Benefits maps (Showing linked benefits, and maybe you could link this back to the task that delivers the output as well?)
• Dependency networks (I’m not actually sure what this is in the context of benefits – something to do with how projects or benefits link to each other? If you have a better understanding, let us know in the comments section at the bottom)
• Benefits profile or identity sheet (This describes each benefit and documents the way you will measure it, how much it should deliver in terms of monetary value, covers KPIs and so on. As we have work package documents or WBS descriptions, this is the equivalent for benefits)
• Business case (Doh! Of course this is the most relevant way of a project management working out what the planned benefits should be. It’s also influential when it comes to how the project is judged at the end and whether it is deemed a success, so you should definitely use this as the basis for establishing benefits)
• Benefits realisation plan (assigns a timeframe to each of the benefits)
• Benefits control sheets (I guess this is a way of tracking benefits when they occur and establishing whether they are in acceptable limits. I studied process control as part of Six Sigma and this smacks of something similar)
• Portfolio dashboard (So you can see everything on a single screen, although you have to set it up with the right measures first)
• IT systems (Carlos suggested a few that are specifically designed to help you measure benefits and to support the process. Personally I haven’t used any software tools that work in this way but it is good to know that if you are in a highly systemised environment and want software to help, the tools are out there)
• Health checks (A way of auditing your benefits and the processes as the project progresses)

Roles and responsibilities for benefits realisation management

Carlos covered the roles and responsibilities expected from a benefits realisation exercise within a company.

If you want to implement successful benefits realisation management in your own business then this is what you should look to get set up:

Programme and project governance

This covers the normal governance functions of any project management activity including having the work aligned to overall strategy. You should also make sure that you have the work prioritised and that there is executive leadership in place to support you.

Done by: Project Sponsor

Programme and project management

Here you’re looking to be able to deliver the required outputs, ensure everyone knows what success looks like and manage stakeholders’ expectations with that in mind.

Done by: Project Manager/Team

Benefits ownership

Finally, you want someone to take responsibility for owning the benefits when they are delivered. They are the people who receive the outputs and whisk up their magic to turn outputs into tangible business value.

Done by: Project customer

All this strikes me as vastly similar to the rest of the project management techniques that we have available to us. That’s good news, because it means that benefits management is not difficult or scary and that project managers have the transferable skills to be able to put all this into practice already.

The presentation reassured me that much of what I am doing to ensure my projects deliver tangible benefits is good and solid practice. The theme of value ran throughout the Congress and it’s great to see that (finally) project managers are waking up to the idea that delivering value is not something that someone else does.