Following the decision to go ahead of the Go / NoGo. The proposal requires a serious analysis of the risks and opportunities for the company to complete the project and the expected benefits.
A deeper analysis concerns the customer, several questions imply it. One of the first should validate our past experience with this client or lack of experience in each case the associated risks. If we have already completed projects for this client, do we have a record of these projects and information about payment deadlines, change requests? Information that will be used during the preparation of the proposal. Your organization potentially has a registry documenting some key criteria for your customers. Other information may exist from credit agencies.
A call for tenders is never perfect. You may be able to ask for clarifications, which is usually the case. Eventually, you will have to make some assumptions to prepare your response to the tender. Assumptions will create risks, start documenting them.
It will be necessary to produce an estimate of the time of completion and all the associated costs. Depending on the size of the project, teams from several company groups may be involved. Each of the sub-units will be tempted to keep a certain margin, the maturity of your organization can influence this practice. You do not want to have hidden safety margins in each level of your proposal without knowing it. You may not be competitive anymore.
Depending on the type of project, you will have the equipment and/or subcontractors to be used. They will make their proposals. This evaluation must be done in parallel with yours, you do not want to have as sole information that of your subcontractors or suppliers.
Depending on the nature of your project, you will be involved with the seasons. This is important information, make sure that it is well indicated in your proposal. Some portions that can't or should be done during a frozen period, for example. Be clear.
(To be continued)
Suite à la décision d’aller de l’avant du Go/NoGo. La proposition requiert une analyse sérieuse des risques et des opportunités pour l’entreprise de réaliser le projet et des bénéfices prévus.
Une analyse plus approfondie concerne le client, plusieurs questions l’impliquent. Une des premières, devrait valider notre expérience passée avec ce client ou l’absence d’expérience dans chacun des cas les risques associés. Si nous avons déjà réalisé des projets pour ce client, possédons-nous un registre de ces projets et des informations concernant les délais de paiement, les demandes de changement ? Des informations qui nous serviront lors de la préparation de la proposition. Votre organisation dispose potentiellement un registre documentant certains critères clefs de vos clients. D’autres informations existent peut-être par des agences de crédit.
Un appel d’offres n’est jamais parfait. Vous pouvez peut-être demander des clarifications, c’est généralement le cas. Éventuellement, vous aurez à faire certaines hypothèses, pour bien préparer votre réponse à l’appel d’offres. Les hypothèses créeront des risques, commencez à les documenter.
Il faudra produire une estimation du temps de réalisation et de l’ensemble des coûts associés. Selon l’envergure du projet, des équipes de plusieurs groupes de l’entreprise pourraient être impliquées. Chacune des sous-unités sera tentée de se garder une certaine marge, la maturité de votre organisation peut influencer cette pratique. Vous ne souhaitez pas avoir des marges de sécurité cachées dans chacun des niveaux de votre proposition sans le savoir. Vous risquez de ne plus être compétitif.
Selon le type de projet, vous aurez du matériel et/ou des sous-traitants qui seront utilisés. Ils vous feront leurs propositions. Cette évaluation doit être faite en parallèle avec la vôtre, vous ne voulez pas avoir comme seule information celle de vos sous-traitants ou fournisseurs.
Selon la nature de votre projet, vous serez impliqué par les saisons. C’est une information importante, assurez-vous que c’est bien indiqué dans votre proposition. Certaines portions qui ne peuvent pas ou doivent être effectuées en période de gel, par exemple. Soyez clair.
Article originally posted in LinkedIn (English and French available)
In recent days, we have been able to see that the East energy pipeline project had all the characteristics of a crisis management. This project has indeed been criticized from all sides in the media and the reactions of the promoter allow us to doubt that such criticism had been taken into account in the social acceptance process of the project.
No doubt that sound risk management would have allowed to identify such situations and to react better in the circumstances. I always wonder when projects of this scale do not seem to have set up established risk management process. Yet this is what the best practices suggest; about this, we can draw from two large project management-related organizations such as the PMI with the PMBOK and Axcelos with Prince2.
The implementation of the risk management process, allows among others to identify all types of risks, better understand and ultimately to limit the negative impact of an event if it occurs and thanks to the preventive measures to reduce the impact (probability and/or consequence). Moreover, this process helps to identify and recognize the warning signs and thereby better prepare the organization for the management of crisis or emergency.
Risk management is a proactive approach that limits the need to revert to crisis management. This process must, to maximize efficiency, be implemented from the planning stage and thus offer more options to the organization. When the only choice is crisis management, we are left with a much more limited selection of options which are usually much more expensive.
The implementation of the risk management process is an inexpensive investment but which allows among other to limit the impact of painful incident.
Original article on LinkedIn, you can share
The "Prince 2 Practitioner" certification I recently completed led me to a more strategic review of elements of project management, corporate governance and a project office.
In particular, Prince2 rates as highly important the "Why are we doing this project? ", already identified as critical for the survival of a company, but often overlooked. The life of a business is based primarily on the motivation of its staff and the trust of its shareholders. These are two assets that must be preserved.
Identifying clearly the real reasons for doing a project will always be a winning approach for the company in the medium and long term because it ensures that the evaluation of the level of achievement of objectives remains fair and equitable. It is essential for maintaining an optimal level of staff motivation at all levels. Human resources are a major asset, critical to the success of a company, but investors / shareholders also need to understand the strategic framework of the company's key projects to assess correctly the results obtained.
Each company operates in a specific context and pursues different business objectives. Any business whether public or private must analyze a portfolio of projects. These projects originate internally, or from a call for tenders or direct requests but a company can’t usually realize all.
Choices must be made. It will be better managed if the objectives which justify the selection are clearly identified. For a company, it may be opening a new market, for another ensuring continuity for projects teams, reducing certain costs, increasing customer satisfaction or optimizing capacity. Many other elements can be part of the reasons for undertaking a project. In the private and in the public sectors, political influences are often part of justification.
Explicitly documenting the reasons why, the company choose a project allows initially to properly inform management, shareholders and all stakeholders about expectations for this project. These initial reasons are the criteria that the company must then use to assess project performance.
The passage of time from the selection of the project to its completion often results in an evolution of the company business outlook that makes many stakeholders forget the original goals. The result in a success evaluation grid comprising elements that do not reflect the original objectives. For example, the realization of the usual returns on a project may have been sacrificed at inception in favor of sustainability, the overall performance of the business or risk diversification. I noted that once a project is ongoing managers too often forget the fundamental objectives they wanted to achieve with this project. If the goal was to open a new market this is the key criterion for evaluation and the profitability of the project itself becomes a relative criterion.
It is essential that each project manager keeps prominently in mind the expectations of the company for the project. Throughout the project, the achievement of the objectives should remain the guide orienting his decisions based. His performance should be evaluated based on the achievement of the clear objectives that justified the choice of the project. In addition, clear targets enable the monitoring to ensure that the objectives are still valid and achievable.
In a slow economy, a company may choose to bid lower prices. The project objectives are therefore intended to maintain expertise but achieving a given level of profitability is not part of the objectives. The bid for a fixed-price project is won and accepted by all. During the following months, the company's directors are replaced and an economic recovery takes hold. In another context, there will be tenders to expand in new markets to diversify risk or aiming at cracking open a market of the future knowing that profitability is not at the rendezvous. For another company, it will at great expense implement changes to a system to comply with a new legislation. Or build an infrastructure in winter despite higher costs in response to a particular event. No doubt you have your own examples.
Without explicit targets, a project manager will have difficulty in justifying low profitability to new directors. If he is forced to pursue irreconcilable objectives, it may be that neither the original targets or the new targets will be reached.
Properly applied this approach of continuity, highlighted as strategically important by Prince2, avoids turning into a bad project what could have been a winning project. Demonstrating that the resources have been used for projects that served the business objectives, will also have a positive impact on the perception of shareholders that for state-owned-enterprises are the citizens they are mandated to serve.
Original article on LinkedIn, you can share