Optimizing business potential – managing customer requirements and expectations

Thomas Walenta, PMP, PMI Fellow

President 1998-2005 of PMI Frankfurt Chapter, Honorary Member

Board of Directors, PMI 2006-2008

thwalenta@online.de

Facts, Findings and Conclusions

Projects do not deliver benefits, they deliver – deliverables Project Management Methodologies do not help to deliver benefits Project Managers are not educated to deliver benefits Sponsors often ask Project Managers the wrong questions

There is a problem in delivering projects There is a problem in obtaining business benefits / expectations There is a problem in getting the right requirements from the right

stakeholders

Program Management has to complement Project Management to deliver benefits

Worldwide, organizations in business and government claim about failed projects and missed business objectives

Public Projects are more visible, hence there is more (bad) evidence Gap between Business and IT (= benefits and deliverables) Benefits not realized from projects (is it PM’s fault?) Technology works fine but organizational change did not happen

Challenged

Succeeded

Failed

Challenged53%Succeeded

29%

Failed18%

• 33% of software investments used to repair projects (Atlantic Guide)

• 56% of projects have cost overruns of >50% (Standish Group 2007)

• 84% of projects have time overruns

(Standish Group 2007: IT Projects)

A Study reveals a disturbing reality: even among projects that are delivered at least 90% on time & on budget,

majority fails to deliver 'business expectations'.

Business outcome expectations include

Delivery quality End-user adoption Business case attainment Sponsor satisfaction

Challenged53%Succeeded

29%

Failed18%

Copyright The Corporate Executive Board, www.pmo.executiveboard.com, 2009 Study 'Project Managing Business Outcome'

The top-performing projects in terms of budget and schedule compliance attain on average only 53% of their business outcome expectations.

PMI's 'Pulse of the Profession' Report reveals still unsatisfying status of project delivery and gaps between project and

benefits delivery success

Copyright PMI 2013 2013 Pulse of the Profession

Projects not meeting goals (budget, time, scope) 37,7%

Organisations showing high PM maturity 17%Organisations showing high benefits realisation maturity 12%

Low performing organisations (<60% successful projects) 22%High performing organisations (>80% successful projects) 8%

Maturity gaps high vs low performers:- PM practice 29% 6%- Benefits realisation 29% 3%- Agility 28% 4%- Portfolio Mgmt practice 28% 3%

What sets high performers apart?

- focus on talent management- drive strategic alignment- support standardized PM

Scope, budget, milestones = business benefits?

Successfull project delivered product in time & budget

Successfull program delivered benefits

A benefit is the 'desired result of an initiative undertaken to meet a need or solve a problem'

Pre-project

Are Project Managers educated to transform business goals to requirements and benefits?

• Project Manager‘s curriculums & certifications– Magic triangle scope/quality – cost – time– Soft skills to lead a team– Organizational skills – Technology

• Project life cycle covers part of total life cycle– Business case, strategic alignment is done before project– Requirements are part of business case development– Benefits often achieved after project delivered

costtime

scope

Post-projectProject

• Benefits are specific to a business / a company• Benefits delivery is often seen as a primary task of middle

management, consulting companies or not addressed specifically

• 'Benefits' is found 24 times in PMBoK Guide 5th edition, but 129 times in PgM Standard 3rd edition, having benefits management and other processes and artefacts

• Prince2 mentions benefits in the business case and benefits review plan, but MSP covers benefits management

• IPMA ICB does not have a focus on benefits management, but offers Success Criteria for projects

PM Standards and Methodology provide no real help to Project Managers in delivering benefits

?Stake-holders

(sponsors)

Stake-holders(users)

strategy

How to successfully to fullfil business expectations = deliver benefits to stakeholders?

Req

uire

men

ts

Ben

efits

Stake-holders

(sponsors)

Stake-holders(users)

strategy

Req

uire

men

ts

Program

Project Adeliverable

ScopeCostTime

Ben

efits

(sus

tain

ed)

Ben

efits

(con

solid

ated

)

Project Bdeliverable

ScopeCostTime

Discrete benefit

BenefitsIdentfication

BenefitsAnalysis & Planning

Benefitstransition

Benefitssustainment

Benefits Delivery

Understand what has to be done in addition to project management - and how it can be accomplished!

Component CDiscrete benefit

Program Benefits Management transforms stakeholder requirements into sustained benefits

Based on PMI Standard for Program Mgmt, 3rd Ed. & IBM's WWPgMM

BenefitsIdentfication

BenefitsAnalysis & Planning

Benefitstransition

Benefitssustainment

Benefits Delivery

Business Case Program

Mission Define CSFs Measurement

Structure

Benefits Realisation

Plan

Define Program

ComponentsDefineKPIs Performance

Baseline

Start, monitor & transition

components

Evaluate KPIs

Monitor organizational environment

Program definition

Program benefits delivery Program closure

Transition Plan Verify

Transition

Operational tasks

Program Lifecycle

Stake-holders

(sponsors)

Stake-holders(users)

strategy

Who influences requirements?Who can control requirements? Project or Program Manager?

Req

uire

men

ts

Ben

efits

Projectdeliverable

ScopeCostTime

Discrete benefit

Project Program Portfolio

Objective Deliver previously agreed and defined deliverables

Achieve previously agreed and defined strategic objectives, realize business benefits

Permanently attempt to reach the mission of the organization

Duration Finite, short term Temporary, might be flexible

Infinite

Focus of Mgmt

Scope and deliverables Value and BenefitsStakeholdersInterfaces and Integration

Prioritization of Projects & Management of Resources

Decision-making

In phases, based on milestones/gates

In stages/projects, based on benefits realization

In periods, based on management cycle

Sponsor Program Manager or Project Sponsor

Strategic Objective Owner (Business Exec Sponsor)

Organization (CEO, COO)

Success In scope, quality, budget, time & stakeholder satisfaction

Achieve benefits & satisfy stakeholder needs

Aggregate investment performance

What is it about Efficiency Effectiveness Agility

Differences between projects, programs and portfolios

14

Program Project

PlanControl Deliver

Scope

TimeCost

UnderstandCreate

Achieve

Benefits

GovernanceStakeholders

Program Management is outward focussed while Project Management mainly deals with project internals

Five key findings from the CEB study

Copyright The Corporate Executive Board, www.pmo.executiveboard.com, 2009 Study 'Project Managing Business Outcome'

On-time and on-budget project performance is necessary but not sufficient for attaining business outcomes.

Only a select number of project management activities drive business outcome attainment (27 out of 150+)

Project manager effectiveness is the number-one driver of business outcome attainment - critical thinking and management skills truly matter

Re-center project planning around business outcomes (define benefits elements early related to the most critical business outcomes)

Over-manage stakeholder involvement at Concept definition (establish a common understanding of victory)

Capabilities of a successful program manager are different to those of a good project manager

PMI Congress 2003 – Europe Paper Pellegrinelli, Partington and Young

Role of the sponsor is crucial to program/project success – do executives understand?

Would you expect a Program Manager to understand?

Executive workshop, Th. Walenta

1. Improving project / program management

2. Removing roadblocks

3. Providing support

4. Providing direction

5. Using checks and balances

Processes

Escalation Mgmt

Coaching

Governance / Leadership

Monitoring

One frequent trap in a global environment are Stakeholder‘s cultural differences, driving

expectations and requirements

4-Dimension Model by Geert Hofstede

Power Distance: The extent to which the less powerful members of institutions and organisations accept that power is distributed unequally

Masculinity Masculinity: The dominant values in society are

achievement and successFemininity: The dominant values in society are

caring for others and quality of life

Uncertainty Avoidance: The extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these

IndividualismIndividualism: People are supposed to look

after themselves and their direct family onlyCollectivism: People belong to ‘in-groups’ that

take care of them in exchange for loyalty

Extended by fifth dimension

www.geerthofstede.com

Power Distance

Uncertainty Avoidance

Masculinity

Individualism

Long Term Orientation

Expectations often are not-communicated requirements and will be different in different cultures

Conclusion

Program Management has to complement project management to deliver benefits

Program Managers have different capabilities than Project ManagersProject Managers do not have the methods and education to deliver benefits

Project Management alone is not delivering benefits

Requirements are influenced from different stakeholder groups and from program progress, Requirements are driving and defining benefits

Expectations may differ based on the cultural background and should be considered to become explicitly stated requirements