Evaluating Projects in the New Economy

Evaluating Projects in the New Economy

Chris Chambliss and Bill Yarberry

AgendaAgenda

• Setting the Stage

• The PMO and Business Alignment

• The Bottom Falls Out

• Project Evaluation Here and Now

• Tips and Techniques

• Questions

Setting the Stage:

NCI Building SystemsSetting the Stage:

NCI Building Systems

Setting the Stage:

PMO…The Early Days at NCISetting the Stage:

PMO…The Early Days at NCI

• Only 28% of projects started ever reach their time / cost / quality targets*– 32% - Inadequate project management

and improper use of PM tools– 20% - Lack of communication– 17% - Lack of understanding of scope

• Did some hiring, firing, laughing and crying

* Standish Group Chaos Report

Setting the Stage:

PMO…The Early DaysSetting the Stage:

PMO…The Early Days

PMI Methodology

PMBOK Processes

Resource Management Scope Control

Requirements Gathering

PMO and Business Alignment:

PMO CompetencyPMO and Business Alignment:

PMO Competency

Stage One:Project Office

Independent project offices and project managers

Applies project management techniques

No program level authority

Stage Two:Basic PMO

Provides standard and repeatable PM methodology for all projects

Develops common tools for all projects

Emphasizes the foundation of a viable PM environment

Stage Three:Standard PMO

Improved PM capabilities and maturity

Introduce project reporting tools and collaboration techniques

Interface between the business, executives and project teams

Full set of PMO functions in use

Stage Four:Advanced PMO

Focuses on integrating business objectives into the PM environment

Applies common practices to projects and business; a “projectized” organization

Can be a separate business unit

State of the art PM practices and tools

Advanced staffing

Stage Five:Center of Excellence

Direction and influence for enterprise project management

Manage continuous improvement and cross-department collaboration to achieve strategic business goals

Continues to build relationships with stakeholders, customers and vendors

Oversight and control to other PMO units

Strategic Alignment

Business Maturity

Process Support

Project Oversight

Process Control

* The Complete Project Management Office Handbook

The Bottom Falls Out:

What Goes Up Must Come DownThe Bottom Falls Out:

What Goes Up Must Come Down

The Bottom Falls Out:

Why Do I Need You?The Bottom Falls Out:

Why Do I Need You?

• A new vocabulary was introduced– Value Proposition– Strategic Alignment– Value-Driven ROI– Elimination of Suboptimization

• Autonomous decisions being made• PMO adaptation and flexibility

becomes key• Enterprise perspective of the PMO

function is part of the answer

Project Evaluation:

Tools & TechniquesProject Evaluation:

Tools & Techniques

• What the PMO brings to the table

• Financial evaluation

• Objective enterprise view

• Risk assessment

• Not a standard book approach; case by case

Project Evaluation:

Tools & TechniquesProject Evaluation:

Tools & Techniques

PMOLC / SDLCRisk Assessment Model

Project DashboardBusiness Value / ROIProject Request Form

Project Life Cycle

Risk Level

High High

High Medium

Medium High

High Low

Medium Medium

Low High

Low Low

Low Medium

Medium Low

Tier

1Ti

er 2

Tier

3Ti

er 4

Project Evaluation:

Project Request FormProject Evaluation:

Project Request Form

• Getting Executive management to the table

• Look at it from their perspective• Understand what they’re going to

ask• Find a way to make it work in your

size company• Utilize a project dashboard that’s

clear and concise

Project Evaluation:

Executive ManagementProject Evaluation:

Executive Management

Project Evaluation:

Project DashboardProject Evaluation:

Project Dashboard

Project Evaluation:

Risk AssessmentProject Evaluation:

Risk Assessment

• Impact and complexity drive the risk level

• Risk level results in Tier 1 – Tier 4 project

• Project tier drives level of project management

• Depth of deliverables, amount of testing, Internal Audit participation

• Determine if the project is capital or expense

• Major cost categories:– Software / Hardware– Consulting Services– Employee Labor– Expenses

• Often overlooked cost categories:– Training– SOP 98– Capital Interest– Sales Tax– Maintenance

Project Evaluation:

Financials – Cost EstimatesProject Evaluation:

Financials – Cost Estimates

• Utilize the financial experts in your company

• NPV, IRR, ROI, Payback Period; what else do you need to know?

• Every project now demands financial justification

• Benefit categories from the Project Request now come in to play

Project Evaluation:

Financials - JustificationProject Evaluation:

Financials - Justification

• Compare planned to actual costs• Show project completion statistics• Build metrics history and use for action

Project Evaluation:

Benefit Realization & MetricsProject Evaluation:

Benefit Realization & Metrics

Tips and Techniques:

Building AlliancesTips and Techniques:

Building Alliances

• Alliances can be the key to continued success• Working with IT, Accounting, Audit can have its rewards• Gaining understanding of each other’s objectives can help

move everyone’s projects forward

Tips and Techniques:

FastTrack ModelTips and Techniques:

FastTrack Model

Request It

Scope It and Do It

Deliver ItRequest It

Scope It and Do It

Deliver It

• Streamlined approach• Agile response to the business• Uses the project request process• Reduces the quantity of deliverables• Timeline is generally 1-3 months

• **Goal: To deliver smaller, quick-win projects faster

Tips and Techniques:

Growing the CultureTips and Techniques:

Growing the Culture

• Choose quick win projects to show success

• Educate your peers

• Understand the maverick / cowboy mentality and how to help

• Wear multiple hats

• Today’s economy demands higher performance and results

• Get senior management involved

• Tailor the approach to your company

• Adopt a methodology…but plan to be flexible

Closeout:

Elevator SpeechCloseout:

Elevator Speech

QuestionsQuestions

• Chris Chambliss

• Ph: 281-897-7611

• Bill Yarberry

• Ph: 713-582-6275