The Future of Project Management: Preparing The Next Generation Project Manager

(1)

By

Harold Kerzner, Ph.D.

1

The Future of Project Management:

Preparing The Next Generation

Project Manager

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Participant’s Notes:

2

Most of the material in this presentation has been

taken or adapted from several sources:

Harold Kerzner, Advanced Project Management: Best

Practices on Implementation, 2

nd

_{Edition, 2004, John}

Wiley & Sons Publishers

Harold Kerzner, Project Management Best Practices:

Achieving Global Excellence, 1st Edition, 2006; and 2

nd

Edition, 2010, John Wiley & Sons and IIL Publishers

Harold Kerzner and Frank Saladis, Value-Driven Project

Management, 2009, John Wiley & Sons and IIL Publishers

Harold Kerzner and Carl Belack, Managing Complex

Projects, 2010, John Wiley & Sons and IIL Publishers

Harold Kerzner, Project Management Metrics, KPIs and

Dashboards, 2011, John Wiley & Sons and IIL Publishers

Copyright

(3)

Participant’s Notes:

3

Changing Times:

The PM Becomes

A Business Manager

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Participant’s Notes:

Today’s View of Project Management

Project management has evolved into

more of a business process rather than

just a project management process.

Today we are managing our business

by projects, and project management

is being applied to both traditional and

nontraditional projects.

Each project is seen as a collection of

value scheduled for realization.

(5)

Participant’s Notes:

Changes in Project Management

ROLE AND RESPONSIBILITY MONITOR AND CONTROL DURING EXECUTION PLANNING FOR PROJECT EXECUTION STRATEGY DEVELOPMENT, PROJECT SELECTION AND PROJECT EXECUTION INPUT WHEN BROUGHT ON BOARD AFTER CONTRACT AWARD OR AT END OF INITIATION DURING PROPOSAL PREPARATION BEGINNING OF COMPETITIVE BIDDING AND PROTFOLIO SELECTION OF PROJECTS KNOWLEDGE REQUIREMENTS TECHNICAL KNOWLEDGE (COMMAND OF TECHNOLOGY) MOSTLY TECHNICAL BUT SOME BUSINESS KNOWLEDGE

MOSTLY BUSINESS BUT SOME TECHNICAL KNOWLEDGE

(UNDERSTANDING OF TECHNOLOGY) CUSTOMER

EXPECTATIONS DELIVERABLES DELIVERABLES BUSINESS SOLUTIONS DEFINITION OF SUCCESS MEETING THE TRIPLE CONSTRAINT MEETING THE TRIPLE CONSTRAINT MULTIPLE SUCCESS CRITERIA (PROJECT AND BUSINESS VALUE SUCCESS)

HISTORICAL 1990’S TODAY

VIEW

(AND IN THE FUTURE)

5

Webinar Learning Series

1-5 IIL-Webinar

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Participant’s Notes:

Executive View of Project Management

OLD VIEW

NEW VIEW

Project management is a

nice to have career path,

but not necessary

Project management is a

strategic or core

competency

We need our people

certified as a PMP

®

We need people certified

in project management

and in business processes

PMs are used for project

execution only

PMs should be involved in

portfolio management and

capacity planning

Strategy and execution

are separate activities

PMs must bridge strategy

and execution

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Participant’s Notes:

7

Global Versus Non-Global Companies

FACTOR

NON-GLOBAL

GLOBAL

Core business

Sell products and

services

Sell business

solutions (value)

PM satisfaction

level

Must be good at

project mgt.

Must excel at

project mgt.

PM methodology

Rigid

A framework

Supporting tools

Minimal

Extensive

Continuous

improvement

Follow the leader A necessity for

survival

Business

knowledge

Your company’s

business

strategy

Client’s business

strategy as well

as yours

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Participant’s Notes:

8

(9)

Participant’s Notes:

Percent of Projects Using Project Management

Current use of

project management

(10)

Participant’s Notes:

Limitations to Selecting a Complex Project

No project portfolio management

function

Poor understanding of capacity planning

Poor understanding of project

prioritization

Lack of tools for determining value

Lack of project management

(11)

Participant’s Notes:

Project Management Software

INITIATION PLANNING EXECUTION CONTROLLING

CLOSURE

95% of Today’s Software

• Portfolio Management

• Benefit-Cost Analyses

• Feasibility Studies

• Criteria Definition

• KPI Definition

• Assumptions Defined

• Evaluation (Value) Criteria

• Risk Management

• Behavioral Software

• Best Practices

Library

• Failure Analyses

• Lessons Learned

• KPI Library

• Stakeholder

Management

Library

Areas of Deficiency

11

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Participant’s Notes:

The “Traditional” Project

Time duration of 6-18 months

The assumptions are not expected to change over

the duration of the project

Technology is known and will not change over the

duration of the project

People that start on the project will remain

through to completion (the team and the

sponsor)

The statement of work is reasonably well-defined

The target is stationary

(13)

Participant’s Notes:

The “Nontraditional” (Complex) Project

Time duration can be over several years

The assumptions can and will change over the

duration of the project

Technology will change over the duration of the

project

People that approved the project (and are part of

the governance) may not be there at completion

The statement of work is ill-defined and subject

to numerous changes

The target may be moving

Multiple stakeholders

(14)

Participant’s Notes:

MANAGING

TRADITIONAL

PROJECTS

MANAGING

NONTRADITIONAL

PROJECT

Single person sponsorship

Governance by committee

Possibly a single stakeholder

Multiple stakeholders

Project decision-making

Both project and business

decision-making

Inflexible project

management methodology

Flexible or “fluid” project

management methodology

Periodic reporting

Real-time reporting

Success is defined by the

triple constraint

Success is defined by the triple

constraint and value

KPI are derived from EVM

Unique value-driven KPI

Stakeholder mgt. noncritical

Stakeholder mgt. critical

(15)

Participant’s Notes:

The Need for Business Solution Partners

Not all companies have the ability to

manage complexity on their own

Insufficient resources

Lack of qualified resources

Lack of support for project management education

Lack of a project management methodology

Lack of knowledge in dealing with complexity

Lack of supporting tools for project management

Fear of failure

(16)

Participant’s Notes:

Customer RFP Requirements

Contractors must have PMP

®

_s

Contractors must have an EPM system or

framework, and it may have to be qualified or

approved by the client

Contractor is willing to customize the

methodology or framework to the client’s

environment

Contractors must capture best practices and

share intellectual property with the client

Contractors must identify a reasonable

maturity level in project management

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Participant’s Notes:

17

Customer’s

Expectations

Contractor’s

Expectations

Business

Solutions

Long Term

Strategic

Partnerships

“Engagement” Expectations

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Participant’s Notes:

Project Management

BEFORE ENGAGEMENT

PROJECT MANAGEMENT

AFTER ENGAGEMENT

PROJECT MANAGEMENT

Continuous competitive

bidding

Sole-source or

single-source contracting (fewer

suppliers to deal with)

Focus on near-term value

of the deliverable

Focus on lifetime value of

the deliverable

Client develops their own

business strategy

Contractor supports the

client in project portfolio

management

Client has access to

limited PM tools

Access to contractor’s

tool kits

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Participant’s Notes:

Areas of Best Practices (Givebacks)

Project Planning/Execution

Financial/Portfolio Mgt.

Risk Management

Scheduling

Others

Number of Best Practices

T

y

p

e

o

f

B

e

s

t

P

ra

c

ti

c

e

19

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Participant’s Notes:

20

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Participant’s Notes:

Skill Set

All project managers have skills, but

not necessarily the right skill set for

the projects at hand or in the future.

What skills/competencies will project

managers need in 3 years, 5 years and

10 years from now?

(22)

Participant’s Notes:

INTEGRATION MGT. SCOPE MGT. TIME MGT. COST MGT. PROCUREMENT MGT. HUMAN RESOURCE MGT. COMMUNICATIONS MGT. RISK MGT. QUALITY MGT. POLITICS CULTURE/ RELIGION BUSINESS/ STRATEGY STAKEHOLDER MGT.

(23)

Participant’s Notes:

Project Management Growth

Junior Project Manager

Project Manager

Senior Project Manager

Global Project Manager

Project Sponsor

Career Path Opportunities

23

Ce

rt

ifi

ca

tio

n

Bo

ar

ds

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Participant’s Notes:

24

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Participant’s Notes:

New Developments in Project Management

New Success Criteria

Key Performance

Indicators

Dashboard

Design

Governance

Measurement

25

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Participant’s Notes:

The Changing Definition of Success

Success is simply the triple constraint

Customer satisfaction must also be

considered

There are other (secondary) factors to be

considered

Success must have a business component

The constraints must be prioritized

There are multiple definitions of success

(each customer/stakeholder can have a

different definition)

There are categories of success, and value is

now part of the success criteria

(2004)

(27)

Participant’s Notes:

Modifying The Triple Constraints

T

im

e

C

o

st

Scope

Image/ Reputation Risk Quality Value

V

a

lu

e

Q

u

a

lit

_y

Image/Reputation

Scope Risk Cost Time

(28)

Participant’s Notes:

Disney’s Prioritization of Constraints

• Safety

• Aesthetic Value

• Quality

• Time

• Cost

• Scope

(29)

Participant’s Notes:

New Developments in Project Management

New Success Criteria

Key Performance

Indicators

Dashboard

Design

Governance

Measurement

29

(30)

Participant’s Notes:

Defining Value Metrics (KPI)

PAST VIEW

PRESENT VIEW

Metrics are fixed for

the duration of the

project

Metrics can change

over the duration of

the project

(Metric-Driven Project

Management)

(Time and Cost

(31)

Participant’s Notes:

31

Typical KPI

Percent of work packages adhering to the schedule Percent of work packages adhering to the budget Number of assigned resources versus planned resources Percent of actual versus planned baselines completed to date Percent of actual versus planned best practices used

Project complexity factor Customer satisfaction ratings

Number of critical assumptions made

Percent of critical assumptions that have changed Number of cost revisions

Number of schedule revisions

Number of scope change review meetings Number of critical constraints

Percent of work packages with a critical risk designation Net operating margins

(32)

Participant’s Notes:

Dissecting The KPIs

Key

= a major contributor to success or

failure

Performance

= measurable, quantifiable,

adjustable and controllable elements

Indicators

= reasonable representation

(33)

Participant’s Notes:

Defining a KPI

KPIs can be selected using the following:

Predictive:

able to predict the future of this

trend

Measurable:

can be expressed quantitatively

Actionable:

triggers changes that may be

necessary

Relevant:

the KPI is directly related to the

success or failure of the project

Automated:

reporting minimizes the chance

of human error

Few in number:

only what is necessary

33 33

(34)

Participant’s Notes:

New Developments in Project Management

New Success Criteria

Key Performance

Indicators

Dashboard

Design

Governance

Measurement

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Participant’s Notes:

35

Dashboard

(36)

Participant’s Notes:

Dashboards Versus Scorecards

FACTOR

DASHBOARDS

SCORECARDS

Performance

Operational

issues

Strategic issues

WBS level for

measurement

Work package

level

Summary level

Frequency of

update

Real time data

Periodic data

(37)

Participant’s Notes:

New Developments in Project Management

New Success Criteria

Key Performance

Indicators

Dashboard

Design

Governance

Measurement

37

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Participant’s Notes:

A Comparison: EVMS, EPM and VMM

Variable

EVMS

EPM

VMM

Time

Cost

Quality

Scope

Risks

Tangibles

Intangibles

Benefits

Value

Tradeoffs

(39)

Participant’s Notes:

Measuring The Metric

Metric or KPI

Ability to

Measure

Profitability

Easy

Customer Satisfaction

Hard

Goodwill

Hard

Penetrate New Markets

Easy

Develop New Technology

Medium

Technology Transfer

Medium

Reputation

Hard

Stabilize Work Force

Easy

Utilize Unused Capacity

Easy

(40)

Participant’s Notes:

Types of Performance Reports

Progress

Reports

Status

Reports

Forecast

Reports

(41)

Participant’s Notes:

Benefits and Value at Completion

Forecast

Reports

• Time at Completion

• Cost at Completion

Traditional Reporting

Future Reporting

• Time at Completion

• Cost at Completion

• Benefits at Completion

• Value at Completion

• Other Metrics at Completion

(Business Leading Indicators;

i.e. Time to Value)

(42)

Participant’s Notes:

New Developments in Project Management

New Success Criteria

Key Performance

Indicators

Dashboard

Design

Governance

Measurement

(43)

Participant’s Notes:

Conclusions and Walkaways

Project managers are more knowledgeable

about the business

Project managers should participate in

project portfolio management

Client’s perception of value may be more

important than time or cost

Executives must invest in the future of

project management in their organizations

Project managers are not and will not be a

threat to senior management