TimeControl 2.1 Presentation

Learning to Thrive in a Risk-averse CultureChris Vandersluischrisv@hmssoftware.ca President, HMS SoftwareUnderstanding the nature of risk, and the relationship it has with your organizational culture 2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.1HMS History1984HMS Software founded. First project: automating the project office at Philips Information Systems and creating a project timesheet1985HMS becomes a Welcom Software alliance partner1994HMS releases TimeControl 1.01995HMS releases TimeControl 2.0 for Windows with links to Microsoft Project1995HMS joins Microsoft Project Solution Partner program1997HMS becomes a Primavera Technology Alliance Partner1997HMS releases TimeControl 3 as a client/server product1999HMS releases first web timesheet interface for TimeControl2001HMS releases TimeControl 4.0, a full web-based version 2004HMS named as a Premier Microsoft Project Solution Provider2005HMS becomes a Microsoft Gold Certified Partner2006HMS named as a First to Market partner by Microsoft2007HMS releases TimeControl Industrial 4.72007HMS releases TimeControl 5www.hmssoftware.ca 2007 Heuristic Management Systems Inc.Defining Project RiskReal-world InterpretationRisk management is the prevention of being blind-sided early and often by events not under the full control of project managers. It includes the timely response by project sponsors and senior mangers to serious risk that can adversely impact project success and business objectives Classic DefinitionRisk management is the systematic process of identifying, analyzing, and responding to project risk. It includes maximizing the probability and consequences of positive events, while minimizing the probability and consequences of events adverse to project objectiveswww.hmssoftware.ca 2007 Heuristic Management Systems Inc.4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.3Defining Risk is Half the BattleThe classic definition of project risk comes directly from Project Management Institutes (PMI) public website as an example of how the industry tends to look at project risk.The second bullet reflects the reality of many project managers and teams, who work in company cultures that often overlook or outright ignore risk because its easier to focus on whats already broken, rather than anticipating what might break in the near future. Notice that the ultimate goal is to improve the likelihood of project success and meeting business objectives rather than simply avoiding problems at the project team level.Urban Legends About RiskWe tried managing risk, but projects still failed. Reality: You were either tracking the wrong risks, or failed to get management action on the most serious risks Management never responds to risk, so why bother? Reality: If projects arent linked to business objectives, management often will not see the value in taking action (compared to other priorities)We cant really manage the unknown, so why try?Reality: Only an estimated 10% of all risks are actually unforeseeablewww.hmssoftware.ca 2007 Heuristic Management Systems Inc.4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.4Urban Legends About Risk By urban legends, we mean certain beliefs that have been around so long that people simply assume they are true without questioning its legitimacy. For each of the three statements on this slide, there is a corresponding reality that will help the audience better understand the true nature of risk.Bullet #1: Approximately 90% of all risks can be identified early in the project life cycle, and efforts can be taken to minimize any threat they may pose.Bullet #2: The most serious risks that can lead to project failure are often beyond the control of project managers. The key is to engage upper management as early as possible so that decisions can be made before the threat of failure arises.Bullet #3: Management isnt always to blame for not acting on project risks. Project teams need to help management make smart, timely decisions by prioritizing the risks according to probability and severity of the threat.Balance Risk ManagementUnaware of or Ignore RisksMicro-Managing All Known RisksCan Management quickly grasp which risks are a real threat to project & business objectives?Project Manager Death Wish0% Effort100% EffortAchieving Balance:Be aware of all known risks, but be proactive in managing the most serious threats 2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.5Do Nothing vs. Micro-management of Risks While ignoring serious risk can prove lethal for a project manager, trying to identify and respond to every potential threat (regardless of how large or small) can consume a tremendous amount of valuable time and energy. Plus, upper management may not see the forest through the trees if they are inundated with risks from all existing projects.On the positive side, organizations that focus on improving overall project risk will probably realize a competitive advantage in the marketplace. A plan for continuous improvement over time is the real key to long-term success. It doesnt have to happen overnight.Major Dimensions of RiskProject RisksCost, schedule, planning, resources, scope changes, dependencies, qualityInternal Risks *Sponsorship, resource conflicts, legal, financial, contract issues

External Risks *Economic downturn, competition, outsourcing, partner roles, regulatoryTechnology Risks *Disruptive technologies, integration, vendor reliability, IT competency(*) Often not within the Project Managers control 2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.6Major Dimensions of Risk While risk comes in all shapes and sizes, there are four categories that can be used to track the vast majority of all project risks (Project, Internal, External, and Technology). The key point here is that project teams often track risks only at the project and technology level, and end up overlooking or underestimating risks that are internal or external to the organization as a whole. The second point worth noting is that project managers often have control only with those risks that occur at the project level. Assistance and decision-making from upper management is often needed to address the other three categories. How well those other three categories are managed can play a big role in the projects success or failure.

Practical Risk ToolsStandard PM Life Cycle with Phase Gate ReviewsStandard Risk Management ProcessAccelerated Project Recovery TemplatePERT AnalysisThree templates that can help improve consistency and early warning response to serious project risks:www.hmssoftware.ca 2007 Heuristic Management Systems Inc.4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.7Practical Risk Tools The next three slides represent some creative approaches that can be taken to address risk within your own organization culture. If nothing else, they may be used for discussions and brainstorm with your peers, team members, and managers.Standardized PM MethodologyPhase 2 ApprovalPhase 2:PlanningPhase 2 Approval CancelNoYesPhase 1:InitiatingPhase 1 ApprovalNoCancelYesNoProject CharterBusiness CaseYesIdentify NeedsProceed ?Phase 3:ExecutionNoIssue/Risk ResponseYesYesReporting & Analysis Phase 3 ApprovalNoProduct Life CycleChange ControlVerify Scope StatusOK?Phase 4:CloseoutNoYesGo to InitiatingUser Accept ?Validate DeliverableBegin CloseoutYesUpgrade ? YesManage ProductLessons & ArchivePhase 4 ApprovalProject CloseoutControllingTime/Cost BaselinesDevelop Project PlanPlan OK?Time/Cost EstimatesImprove & MeasureAssess RisksProduct Development Life CycleCharter OK?User Satisfied ?www.hmssoftware.ca 2007 Heuristic Management Systems Inc.4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.8Standardized PM MethodologyThis is an innovative model based on the fundamentals of PM Best Practices, and is designed to support any kind of project regardless of size, type or complexity. The activities that specifically apply to any given project are inserted as a Product Life Cycle at the beginning of the Execution Phase. The value of this strategy is common adoption of core PM processes for the initiating, planning, executing and closing of all projects which can improve the PM maturity across the entire organization.It also allows for accurate tracking of key project phases across the organization. Questions can then be asked like: What percentage of projects where within 10% of estimated schedule at the end of the planning phase? This can be important, since most troubled or failed projects often go astray in the early stages of development.

Risk Insurance: A Project Recovery Plan

2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.9Risk Insurance Policy: A Project Recovery PlanThe best safety net for any project manager is to have a pre-determined plan for recovering a seriously endangered project. As noted early in this presentation, the project manager often has little control over many risks that can derail even the best laid plans.What you see on this slide is a standardized project recovery plan. When projects get so far out of control that you either have to kill it or do something radical to get things back on track, this is a viable game plan.Especially, on critical projects it can be invaluable to have upper management awareness that this type of safety valve exists if and when its needed. It reflects well on the project manager, and can also increase the peace of mind for executives, who have a lot at stake in the success of highly strategic initiatives. In many ways, this is truly a get out of jail free card that you may want to have when the need arises.

Visualizing Scope, Time and Cost

Scope: Work variance is greater than 20% of baseline workTime: Finish variance is greater than 20% of current durationCost: Cost variance is greater than 20% of baseline cost 2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.10Graphical Indicators for Scope, Time and Cost (Slide 1 of 2)Scope, time and cost are three of the most commonly used indicators of a healthy project. On this slide youll see that graphical indicators have been created by using some of the customization features available within Project Standard. Simple red/yellow/green indicators make it easy for management to review the entire project at a glance. In this case, the threshold for a red indicator was any variance exceeding 20% of the original baseline.If you have skilled technical resources, you can program these indicators to change automatically whenever a threshold is crossed. There are also hundreds of certified Microsoft Project partners, who offer add-on tools, training and consulting on specialty features like this one.Visualizing Scope, Time and Cost

Multiple baselines can also be tracked (see above), and the time-scaled data can be imported directly into Excel for analysis. 2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.11Graphical Indicators for Scope, Time and Cost (Slide 2 of 2)To the right of this slide, youll see a Multiple Baseline view, which automatically displays changes made to the schedule baseline, including the impact on future related activities. As a new feature in Project Standard 2003, you can now track up to eleven (11) baseline changes so you always have a reference point back to the original, approved baseline. This can be a useful tool for helping management to understand the overall risk to a project when approving a new baseline compared to the original baseline that was used when budget and resources were first authorized.

Greater Visibility to Your Project Risks

Risk Probability and Severity: Quickly identify potential threats even without using an automated Risk systemProject Issues: Simple indicators can also be used to highlight serious, unresolved issues 2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.12Greater Visibility to Your Project RisksEven if you do not have a formal system or process for managing risks, you can still use simple graphical indicators for project risk that helps when communicating with team members, management, customers, or anyone who has a vested interest in the projects success.On this slide, weve shown the two classic indicators of risk, which is Probability and Severity using easy-to-read Red/Yellow/Green indicators that represent a High/Medium/Low ranking. This approach ties back to the 3-by-3 matrix we discussed earlier that reflects your organizations risk tolerance and how they look at prioritization.Project Issues:You can also create a column that is used to show Project Issues. While risk focuses on potential threats that may occur in the future, project issues are existing problems that require some type of action before the problem can be resolved. The status for each issue is driven by three basic options: No Issues Identified; Being Addressed; or Still Unresolved. Closing Comment:Now take a look at the bar graph display to the right of this screen. This is a Gantt Tracking view that can be used to assess the impact of delays on remaining tasks. This slide and the previous one are just a couple of examples to show you how visual indicators can be a powerful tool in communicating project status. None of these features requires connectivity to a Server or supporting systems although you may want to consider that in the future.Standard Risk Management Process

This process can be triggered when a High Probability and High Severity risk is identified that could lead to potential project failure. 2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.13Example of Risk Management ProcessBased on the Risk Management work flow shown earlier, the activities highlighted in green would be initiated when a project risk is rated as High Probability and High Severity with the potential to cause serious or fatal disruption to the project.This often would involve the creation of a Contingency Plan that outlines what actions will be taken if and when the threat becomes real. By bringing this is senior managements attention before the threat becomes real, you will have greatly increased the likelihood of getting approval when immediate action is needed. A Consistent PM Methodology

This is just one example of how organizations can implement a standard PM Methodology that can be applied across all projects. The ultimate goal is repeatable project success, and improving overall PM Maturity. 2007 Heuristic Management Systems Inc.www.hmssoftware.ca4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.14Pushing the Envelope: A Consistent PM MethodologyThis slide gives you an idea of what some leading-edge organizations are doing to improve their overall PM Maturity. The focal point is adopting a standardized PM Methodology (this is just one example) that closely adheres to established PM best practices.While the core framework remains the same for all projects (in this case: Initiating, Planning and Closeout Phases), the uniqueness of each project can be addressed by inserting the core project planning effort in the Execution phase. This enables a consistent framework for all projects, while adopting to individual project needs. It doesnt matter if the subject is starting a business, developing new software, or building a new plant..In the long run, this kind of approach should actually accelerate the delivery of successful projects because of a reduction in risk, issues, and poor planning.

PERT Analysis sheet

2007 Heuristic Management Systems Inc.www.hmssoftware.caMulti-Bar PERT Gantt

2007 Heuristic Management Systems Inc.www.hmssoftware.caSummaryThe primary goal of managing risk is to keep from being blind-sided by unexpected events and to enable better decision-making with timely, accurate dataVirtually all project risks can be identified, but the list, priorities and actions should be updated regularlyFor key decision-makers, less is usually more as long as its kept action-orientedIf risks are overlooked, then shame on the project manager if management refuses to act on well-defined, prioritized risks, then shame on management!www.hmssoftware.ca 2007 Heuristic Management Systems Inc.4/18/2007 6:42 PM 2002 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.17SummaryLets do a quick summary of what we discussed during this presentation.(Note: Quickly go over the four bullets, and then you can open up the discussion for any questions the audience may have).

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For more information from HMS:info@hmssoftware.ca 2007 Heuristic Management Systems Inc.www.hmssoftware.ca19Thank You! 2007 Heuristic Management Systems Inc.www.hmssoftware.ca201.23Within Scope ?

Review Risks in Status Reports

Project Manager & Team

Example of Risk Management Process

1.2Risk Accepted ?

Develop Risk Mitigation Strategy

1.8

Identify Project Risk

1.0

Log Risk

1.1

Risk Prioritization & Assessment

1.4

Develop Contingency Plan

1.10

1.9Require Contingency Plan?

Contingency Plan Review

1.11

Project Sponsors

Sr. Mgmt

1.12Plan Approved ?

Contingency Plan Review

1.14

1.15Plan Approved ?

Yes

Yes

Yes

No

No

Notify of Contingency Plan Action

1.20

Update Risk Log & Communicate

1.3

No

Yes

Monitor Risk

1.16

No

1.17Time to Mitigate ?

1.24Retire Risk ?

Tracking & Trend Analysis

No

Yes

Mitigate Risk

1.18

1.6

No

Notify of Contingency Plan Action

Management Review of Risks

1.5

Yes

Launch Contin-gency Plan, If Threat Occurs

1.19

1.22

Yes

Implement Change Control

No

Review & Recommenda-tions

1.13

Notify of Contingency Plan Action

1.21

1.7

PMO Role