The Money Files

During the stage in a program lifecycle where you are identifying the need for a program, you’ll have to put together a business case.

You will need:

A program mandate
A program brief
Some business drivers
Strategy to taste

1. Mix the strategic objectives for the program with the vision statement.
2. Align the mix with the organisational context and the business environment.
3. Add in the expected benefits.  Don’t go too overboard here – you don’t want the mixture to over-inflate.
4. Chop up the overall risk profile, and add in the major risks related to program delivery and benefit realisation.  Don’t sprinkle in the entire list of risks; keep the detail in the risk register.
5. Add in estimated costs and stir through the overall timescales.
6. Does it look like you have enough costs in?  If not, fold in some more now.  Be generous but realistic!
7. Stir to combine all the ingredients with the options and approaches, remembering to add in ‘do nothing’ at this point.
8. Look at the mixture again.  Does it look appetising?  If not, whisk up the costs, objectives and benefits again until it does.
9. Bake slowly and serve to the Senior Responsible Owner.

Hopefully it will be tasty and the Sponsoring Group will want to go ahead with it!

Want some help brushing up your project financial management skills?  Then take the Learn Something New Team Challenge from Safari Books Online.

All you have to do is use one of their books to help you deliver a project of your choice.  Send them the details of your project, the challenges you are facing and some information about the skills you need to do the project - project accounting, help with budgets or whatever.  Then look up what you need to learn on Safari and do it!  There are over 140 financial management books, and a load more on other topics.

The prize is an e-reader or a Starbucks espresso machine (I know which one I would rather have).  The downside is that the e-reader prize is only for a maximum of a team of four, so don't get too excited about being able to dish out iPads to your entire department if you win.

I have used Safari online through a corporate subscription and it is very useful.  In particular, when we needed to assess different software products in order to select the best fit for us, I found A Guide to Software Package Evaluation & Selection: The R2ISC Method by Nathan Hollander which was perfect for the job and a great help.

Essentially, Safari Books Online is an on-demand digital library that delivers thousands of books (and videos) from a variety of technology and business authors from massive publishing houses like O'Reilly and Microsoft.  It's not the easiest thing to read management and technical books on a computer screen, but if you are scanning a contents page for the section that might just save your project, it's certainly worth a look.

I'm not affiliated with Safari in anyway, but I thought this competition was something useful to share - the closing date is 9 August, so get your skates on!

Results of a new global study reveal the concerns, effectiveness and best practices in risk management by organisations that outsource projects. Of the 95 percent of organisations that buy, provide or both buy and provide outsourced services and functions, fewer than half are able to effectively manage risk of outsourced projects.  That’s a pretty poor show, and risk mitigation activities – while they have an associate cost – generally mean less expenditure when things go wrong.  Because you stop things from going wrong in the first place.  Are you following?  I hope so.

Outsourcing in itself is on the rise, as another opportunity to cut costs.  More and more project managers are getting involved with projects that deliver outsourced services, like moving payroll or the invoice processing function to companies that do those activities as their core business.

It’s not surprising that outsourcing projects are managed poorly and don’t reap the expected financial benefits: this study shows that only one-third of organisations always clearly articulate and define financial goals to outsourcing partners.  How are your business partners supposed to know what their tolerance boundaries are if you don’t tell them?

Project managers could put a greater focus on ensuring vendor performance and contract outcomes are clear and defined as part of the project initiation phase.  While you are at it, add risk management to the list – that seems to be a key differentiator among outsourcing partners.

"The ubiquity of project outsourcing creates opportunities for, and demands on, organisations to better develop and refine their outsourcing competencies," said J. LeRoy Ward, PMP, PgMP, Executive Vice President, Product Strategy and Management, ESI International. "The results of ESI's global survey indicate areas for greater performance, productivity and competitive advantages through better risk management."

Here are some other figures from the survey:

• 63% of respondents said that vendor delays were the biggest risk to outsourcing projects.
• 61% said contract scope was the biggest risk.
• 76% of companies go to the effort to evaluate the vendor’s technical ability and past performance – which means that 24% don’t bother (what are they evaluating these companies on then?).
• 65% of companies issue comprehensive, clearly articulated requests for proposals/requests for quotes/tenders that enable standardised responses for comparable analysis – which means 35% don’t, and have to muddle through answers that are difficult to compare.
• Only 50% of respondents thought that their outsourcing team members have appropriate project management experience and skills.
• 75% of organisations do not always clearly define requirements of outsourced projects, which serve as the foundation of successful project management.  No wonder these projects are unsuccessful – the outsourcing people have no idea what is expected of them!

Outsourcing can save money, but you have to do it right – and it seems from these figures that large numbers of companies are most definitely not doing it right.  If you don’t set clear requirements, choose the right partners and monitor the ongoing performance of the relationship then you won’t get out of it what you wanted.  Come to think of it, do you actually know what you want?  Get that bit clear before you even start thinking about going out to tender.
 

What kind of image do you present at work?  It doesn’t have to cost a lot to present a top quality impression, but it is worth making some investment.  I was really pleased to have the opportunity to interview Kat Griffin, publisher of workstyle blog Corporette, about how what you spend on yourself and your appearance makes a difference at work.  Yes, there’s a lot to be said for matching your heel height to the length of your trouser suit.  But listen up, guys, this is about you too…

Spending money on yourself is an investment.  Why should you bother buying expensive clothes?

Clothes affect both the way that you're perceived and the way that you feel about yourself.  From a personal standpoint, better made clothes feel better -- for example, better fabrics are often softer, from wool to cashmere.  Furthermore, clothes you actively like can elevate your mood -- whether it's a tie or a dress or a great pair of shoes, putting them on in the morning gives you a little bit more confidence, and makes it a bit more fun to go to work.  From a perception point of view, people who recognize bad clothes realize you're probably not very invested in your career.

What about accessories? What does a cheap bag/briefcase say about you?

A no-name bag that's well-made is better than a knockoff.  And logo bags, no matter how high end, should really be considered carefully before you wear it, because a lot of people think of them as tacky.  Ultimately, just look for a well-made, functional bag of a good leather, without obvious defects in the stitching or hardware.

Are the rules for contractors/consultants different from permanent employees i.e. do consultants have to pay more attention to this sort of thing and spend more (or at least look as if they have)?

I think it depends on the situation.  On the theory that the contractor/consultant is constantly seeking more work, more business contacts, or even a permanent job, though, professionalism certainly matters -- which means yes, looking polished matters tremendously.

Trappings aside, what about investing in your appearance through hair and nails?  Have you noticed a trend where men are getting their nails done or having facials?

Not really.  In some workplaces, an overly-manicured appearance can even work again you, signifying  that you have a lot of free time to go and get such services done, which could mean that you're not working very hard.

What are the business and personal benefits of doing all this?

Looking polished and put together helps your message be heard without distractions.  It isn't about being the best-dressed person in the room, but it is VERY much about not being the worst-dressed person in the room.  And in terms of personal benefits, there's a tremendous toll that dressing poorly (or even dressing in a uniform, without creativity -- such as women who wear nothing but polyester suits and sensible pumps every day) can take on your psyche.  You want to feel good about what you're wearing -- and that confidence will be conveyed to others.

Thanks, Kat!

 

For every £1 spent on change management on large projects, organisations get a return of £6.50.  

That’s the headline research from a new study by Changefirst, a company that helps organisations implement change more effectively.  You would expect a change management company to advocate change management, but their study shows massive returns on doing change management properly.

The project started as a discussion on LinkedIn and over time developed into a short survey.  Financial outcomes and ROI are difficult to establish, so survey respondents were asked to look at projects 6 to 9 months after completion to see whether the change had ‘stuck’.  

"Delivering successful change projects is a key strategic issue for organisations and it has a significant impact on the bottom line,” says David Miller, Managing Director at Changefirst. “Our research shows that on large projects over 40% of change managers believe that at least a third of the financial gains could be attributable to change management activities alone.

In my opinion, only the large projects have dedicated change managers.  Otherwise project managers are left to do the change management activities too.  The research still stacks up for small projects: on these every £1 spent on change management generates a return of £2, which is still pretty impressive, especially when you think that dedicated change management budgets are just a small part of what it costs to deliver a project.

Over 77% of the 2,500 respondents reported that the proportion of implementation budgets spent on change management activities was less than 10%. “This is a little under the norm,” says Miller. “The proportion of spend on change management is usually about 15% for the larger £1 million plus implementations. It may reflect the economy and type of projects. But it may also indicate that organisations don’t have to spend huge amounts on change management to get a very attractive return.”

How do you know if the return on investment is purely down to change management activities?  The Changefirst survey looked at that too.  On projects that cost over £1m, the savings generated were about £2.5m after 9 months.  Personally, this seems as if companies are choosing exactly the right projects to work on, if they are getting benefits generated so quickly at such impressive rates.  Over 40% of respondents managing large projects, believe that more than 30% of these results could be attributed to change management activities. Essentially that means that for projects costing over £1m, change management  is responsible for over £800,000 worth of value in the first nine months.  For smaller projects the numbers drop, but they are still impressive.

I’m pleased that the study shows that change management is a good thing, and that as well as helping the outcome of projects to stick, it also contributes to financial return.  But I can’t help feeling slightly sceptical about the survey results.  I don’t doubt that Changefirst is reporting exactly what people answered – they have been very transparent and you can read the whole report here) – but the picture seems overly rosy to me.  Either I’m a cynic, or companies really are getting the hang of portfolio management, and in the middle of the economic downturn, really were working on projects that delivered massive benefits over the short term. Good for them.  What do you think?  Is this the experience you’ve had in your company?