Whats Different About PM in the Public Sector
description
Transcript of Whats Different About PM in the Public Sector
What’s Different
Project Management
in the Public Sector
John Alley, Director PMO, McMaster Conference Board of Canada - January 2009
Key Learning Points
• what is different?
• how do we manage?– Resources
– Estimating
– Acquisitions
– Governance
What is the Public Sector?
Public Sector Private Sector
An organization funded (mostly) by the public to provide service for the public.
Gover
nmen
ts
Higher
Edu
catio
n
Health
Car
e
Profit
Seekin
g
Utilitie
s
Charit
ies
Crown
Corpo
ratio
ns
“a degree of unlikeness” Concise Oxford Dictionary, 1990
• difference in kind
• difference in degree
Differences
Differences are important
• differences lead to different actions
• what about PM maturity?
• differences run deeper
What’s Different for Public Sector Projects
Resourcing
What’s Different?
• sources of project financing
Public Sector
Private SectorTaxes, Grants
Earned Revenue,
Capital Markets
More on Financing
Private Sector • profit seeking• grow or die• uses capital market• define a hurdle rate• can find funds for
any project that benefits the bottom line
Public Sector• provide services the
market can’t• resist growth• rarely use capital
market• what’s a hurdle rate?• select the ‘best’
projects that fit the available funds
Constraints
• resources– fixed pot for all projects– every project will have limited funds
• time– legislated deadlines– political deadlines
• scope– usually starts at the minimum
Constraints
• many projects are triple constrained
• contingency?
• risks?
• accuracy of estimates?
For Success on Projects …
• resist “On time, on scope, on budget”• address the triple constraint:
– charter identifies which can be adjusted
– focus on risk analysis– make estimates realistic
• deliver portfolio on budget
For Success on Projects …
• understand the priority and strategic alignment of projects in the portfolio
• know the business benefits and find ways to deliver benefits in stages
• pooled contingencies, stretch objectives
What’s Different for Public Sector Projects
Estimating
What’s Different?
• Size
• Scope of activity (for a given size)
Public Sector
Private Sector
Large Small
Public Sector
Private Sector
Complex Simple
What’s Different - Complexity
City of Hamilton• police• fire• bylaw enforcement• parks• recreation services• garbage collection• sewer services• roads• planning services• … and more
McMaster• 25,000 student
school• 3400 bed residence• 18 food outlets• athletic club• parking service• bookstore• library• computer labs• health clinic• print shop • and more ….
What’s Different – Estimating
• low estimates because:– cost constraint– inexperienced
estimators– resource
expertise
Estimator
ExperienceResource
Expertise
Achievable
PredictableScope
Clarity
Speed of
Delivery
Cost
Constraints
Estimate
For Success on Projects …
• allow for costs of change management
• use parametric tools
• get an independent assessment
• post-project reviews better estimates
For Success on Projects …
• build standard estimates for key components– internal approvals– acquisitions– security testing
• benchmark
• build in gates for re-estimating
What’s Different for Public Sector Projects
Acquisitions
What’s Different - Acquisitions
Bellamy Inquiry
MFP Leasing
Toronto Tax System
What’s Different – Acquisitions
• purchasing policy
– open and accountable process– accessible to all vendors– issues of interprovincial trade– clear and open selection– get the best value for public funds
What’s Different – Acquisitions
• limited exceptions for sole source– defined criteria– get the best value
• approvals based on $ limits– defines accountability– limits risk
• the process takes time
For Success on Projects …
• build the process into templates
• know the rules - the $ limits and the process for each
• define expectations for time/cost/effort to follow the process
• training for PMs– maintain meticulous records– the process protects them
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different – Strategic Alignment
Strategy
Strategic
Programs
Projects
Top-Down Bubble UpPrivate Sector
Public Sector
For Success on Projects …
• Emphasize strategic alignment (business case, charter and communications)
• Understand and document competing priorities
• break projects into smaller components – fit in as resources permit
– allow for benefits even if terminated early
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different - Stakeholders
Private Sector Public Sector
Internal Stakeholders
Owners / Shareholders The public Elected Officials as individuals
Board of Directors Board of Directors / Cabinet / Council / Governors / Senate
Finance Committee Finance Committee
Sponsor SponsorTeam members Team members
Management Management
Employees Employees
Internal customers Internal customers
Internal Audit Internal Audit
What’s Different - Stakeholders
Private Sector Public SectorExternal Stakeholders
Customers CustomersExternal Team Members External Team Members
Labour Unions Labour Unions
Suppliers Suppliers
Consultants Consultants
Consumer Groups Consumer Groups
Special Interest Groups Special Interest GroupsTaxpayers Taxpayers
Government Government – other levels/depts
Financial institutions Financial institutions
Stock analyst/Bond rating service
Bond rating service
For Success on Projects …
• Understand the importance of – taxpayers– other branches and levels of government – special interest groups
• stakeholder analysis templates
• communication plan templates
• peer reviews / steering committee review
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different – Decision Making
ManagementEdict
ConsensusPrivate Sector
Public Sector
For Success on Projects …
• define who makes decisions and how– train sponsors and PMs
• make decision points visible • facilitation / creative problem-solving• standard oversight structures
– Project Selection Board– Steering Committees
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different – Project Selection
QuantitativeCriteria
Qualitative CriteriaPrivate Sector
Public Sector
What’s Different – Project Selection
• the public sector provides services the market can’t– fire-fighting– roads– courts
• but what about private garbage collection, the 407, private prisons?
• what is the ROI on these services?
What’s Different – Project Selection• qualitative vs quantitative criteria
• how do we compare services?– eg: fire fighting vs seniors’ recreation
• how do we balance service improvements, cost savings and legislated requirements?
• how do we align with strategy?
What’s Different – Project Selection
• How do we weigh the importance of each criterion?
Strategy
Cost
Savings
Cost
Avoidance
And
many
more …
Security
Service
Capability
Selection
For Success on Projects …
• standard project proposal format– strategic fit built in– accountability built in
• standard valuation and metrics for– customer service improvement– cost reduction / avoidance– qualitative benefits
For Success on Projects …
25% strategic fit
25% business case / service improvement
25% capacity, security, adherence to standards, project risk
25% corporate risk reduction
20% strategic fit
20% business case
20% value to external clients
20% sponsor commitment
20% project risk
facilitate consensus on a selection model
2 examples:
What’s Different for Projects?• Resources (Financing) – the triple
constraint• Acquisition – policies / time• Estimating – second opinions• Governance
– Strategic alignment – metrics – Stakeholders – templates – Decision-making – define who and how– Project selection – define criteria / qualitative
Questions?
John Alley, Director PMO, [email protected] Conference Board of Canada - January 2009