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1 © Vital Business Solutions Pty Ltd (A.C.N ) Project Management Vs Management By Projects How Management By Projects can transform your IT business
2 © Vital Business Solutions Pty Ltd (A.C.N ) Project Managers Wish Three people: a project manager, a software engineer, and a hardware engineer are in Brisbane for a two-week period helping out on a project. About midweek they decide to walk up and down the beach during their lunch hour. Halfway up the beach, they stumbled upon a lamp. As they rub the lamp a genie appears and says "Normally I would grant you 3 wishes, but since there are 3 of you, I will grant you each one wish." The hardware engineer went first. "I would like to spend the rest of my life living in a huge house in Surfers, with a BMW in the garage, no money worries and lots of friends." The genie granted him his wish and sent him off to Surfers. The software engineer went next. "I would like to spend the rest of my life living on a huge yacht cruising the Pacific with no ties and no money worries." The genie granted the engineer her wish and sent her off to the Pacific. Last, but not least, it was the project manager's turn. "And what would your wish be?" asked the genie. "I want them both back after lunch" replied the project manager.
3 © Vital Business Solutions Pty Ltd (A.C.N ) IT Project Management - the basics
4 © Vital Business Solutions Pty Ltd (A.C.N ) a temporary endeavour undertaken to create a unique product or service. Projects What is project management? Project Management involves balancing competing demands among: Scope, Time, Cost and Quality Stakeholders with differing needs and expectations Identified requirements (needs) and unidentified requirements (expectations)
5 © Vital Business Solutions Pty Ltd (A.C.N ) What is project management? - cont. Trade Off Triangle Scope Time Resources The fundamental problem
6 © Vital Business Solutions Pty Ltd (A.C.N ) Elements of project management Project Integration Management Project Scope Management Project Time Management Project Cost Management Project Quality Management Project Human Resource Management Project Communications Management Project Risk Management Project Procurement Management
7 © Vital Business Solutions Pty Ltd (A.C.N ) How do projects help you manage IT business? Understanding of resource demand Clear definition of scope / objectives Timing / schedules Managing variations to scope Issue tracking / monitoring Collection and management of relevant and related information Charging AND costing control Conveying objectives to staff Projects help with:
8 © Vital Business Solutions Pty Ltd (A.C.N ) Management By Projects - not just consolidated projects
9 © Vital Business Solutions Pty Ltd (A.C.N ) Web Services Application Management Human Resource Management Request Management by Projects Customer Management WIP Supplier Management Billings/ Charges Interfaces / Financial Systems Web Management By Projects
10 © Vital Business Solutions Pty Ltd (A.C.N ) Managing work Work that organisations perform can be categorised into two types: operations and projects. They are the same in that they are both:- Performed by people Constrained by limited resources Planned, executed and controlled They are different in that:- Operations are ongoing Projects are temporary and unique Management By Projects purpose is to manage both types of work as projects.
11 © Vital Business Solutions Pty Ltd (A.C.N ) An approach to business Rudolph Boznak (PM Network, January 1996) puts it succinctly: "Project management versus Management by Projects is not merely a twist on words... there is a significant difference in concepts, scopes and capabilities. Success in a Management by Projects environment requires a far different approach than merely applying more of the same project management systems and methods."
12 © Vital Business Solutions Pty Ltd (A.C.N ) Management By Projects Project Management is: The direction and management of a project A discipline Project-wide A tactical issue Management by Projects is: The integration, prioritization, communication and continuous control of multiple projects An operating environment Enterprise-wide A strategic issue
13 © Vital Business Solutions Pty Ltd (A.C.N ) Program management Management By Projects is sometimes referred to as Program Management. Where large Projects are broken down into smaller projects which consolidate into a single Program. This is not broad enough to classify as Management By Projects. Based on the previous definition we would need to have a single Program for the entire organisation. This is because Management By Projects is organisation wide.
14 © Vital Business Solutions Pty Ltd (A.C.N ) Drivers Project Management is goal focussed. It is concerned with meeting the project goals and expectations. Management By Projects is concerned with operational effectiveness. What is the best that we can achieve given all of the demands being made of our available resources?
15 © Vital Business Solutions Pty Ltd (A.C.N ) Why - the benefits of management by projects
16 © Vital Business Solutions Pty Ltd (A.C.N ) Information availability Management By Projects systems are different to project Management tools in that they allow all activities to be cost effectively managed as projects. They are a central knowledge base for the organisation, being fed continuously from a number of sources compared to Project Management tools that are periodically updated by one or two individuals. Benefits: more extensive and accurate information available on demand for decision making accessible by all stakeholders
17 © Vital Business Solutions Pty Ltd (A.C.N ) Customer management Benefits: Demonstrable level of professionalism from service provider Differentiate the service provider from the competition Increased value add of services Customers improve their level of professionalism Sales opportunities within existing customer base are improved
18 © Vital Business Solutions Pty Ltd (A.C.N ) Time management Benefits: Manage Ad Hoc (unplanned) usage of time as well as planned usage of time Effective prioritisation of work Include all operational activities including support tasks Available, planned and actual time maintained in single knowledge base Reduce administration tasks such as collating information for reporting, manual report preparation etc
19 © Vital Business Solutions Pty Ltd (A.C.N ) Human resource management Benefits: Capacity management – manage resource pool across various views such as across skills, business units etc Real time capacity view and management Resources have visibility of their assignments and priorities and are able to take responsibility for managing them Visibility over the entire organisations activities Manage internal and external resources Increased utilisation of resources Visibility of resource utilisation – utilisation KPIs
20 © Vital Business Solutions Pty Ltd (A.C.N ) Cost management Benefits: Manage charging and cost information – apply a business focus and not just project management focus Analyse all business activities costs including direct revenue generating and non revenue generating activities Planned / forecast charge outs for the organisation can be managed View current progress (estimates to complete) directly with total budget and cost to date Manage internal and external costs (contractors) Defined, repeatable and efficient processes may be implemented and fine tuned, ultimately providing greater value for service dollar.
21 © Vital Business Solutions Pty Ltd (A.C.N ) Communications management Management by projects creates awareness across the organisation of the different activities and priorities. Benefits: Having a full understanding of capacity and project priorities before committing to client projects Understanding the pressures being applied to staff. Interaction between business units Accessibility of information by all stakeholders Product and service delivery processes must be effective and clearly understood internally and externally by customers and applied across all projects
22 © Vital Business Solutions Pty Ltd (A.C.N ) Project scope management The requirements / deliverables of projects are usually not static. They tend to be varied during the life of the project. The service provider is required to effectively interact with the customer and other key stakeholders of the project in recording and responding to these changes. Benefits: Informed decisions and quicker response when facing changes in plans (overall impact is known) Understand how each change impacts the project work and schedule More effective cost management Visibility of actual deliverables against individual requests / requirements History of change in scope during the life of the project
23 © Vital Business Solutions Pty Ltd (A.C.N ) How - is it implemented
24 © Vital Business Solutions Pty Ltd (A.C.N ) Business structure Projectising your business General Manager Help Desk Manager Professional Services Manager Software Production Manager Quality Assurance Manager Technical / R&D Manager Finance Manager Matrix Structure Common Business Structures Hierarchical Matrix Project based
25 © Vital Business Solutions Pty Ltd (A.C.N ) Business structure - cont. Request Help Desk Professional Services Software Production Quality Assurance Finance Customer Log QuoteSpecification Accept Deliver Invoice Software Enhancement Project Receive DevelopUnit Test Function Test Pay Accept
26 © Vital Business Solutions Pty Ltd (A.C.N ) Processes Vs projects In Management By Projects we use projects not only to manage the unique fixed duration projects but also the ongoing activities / processes including for example customer support. The process of providing on going support services can be covered under projects where the process for this has been defined. The project defines and controls the process of undertaking different types of business activities. These on going activities can be managed as projects as long as the system used is capable of handling repeat use of the project. This requires ongoing planning of resources, repeat billings, period by period based reporting and more.
27 © Vital Business Solutions Pty Ltd (A.C.N ) All business activities Management By Projects is an approach to business and covers all activities of the organisation.
28 © Vital Business Solutions Pty Ltd (A.C.N ) What - changes are required
29 © Vital Business Solutions Pty Ltd (A.C.N ) Management techniques Start thinking about and applying the management techniques that Management By Projects provides. Organisations performance reviews based on performance of categories of projects and individual projects rather than departmental performance. An example of a performance indicator available from Management By Projects could be:- Billable Ratio (billable time as a % of total time) Management will have a different expectation of the Billable ratio for Professional Service projects compared to R&D projects.
30 © Vital Business Solutions Pty Ltd (A.C.N ) Define primary business activities The organisation needs to define and manage each type of business activity separately. Marketing Product Distribution Funded Development Projects Business Consulting Fees Application Consulting Fees Research and Development Projects Sales Software Maintenance Services
31 © Vital Business Solutions Pty Ltd (A.C.N ) Management responsibilities The organisation should assign responsibility for business activities to individuals. Business activities Groups of customer, products, locations Process owners Project managers Joint departmental and process responsibilities
32 © Vital Business Solutions Pty Ltd (A.C.N ) Resource management Manage / schedule resources across the organisation Not just within projects Understand and manage capacity and utilisation Include all resources and not just technical or direct fee earning People are the businesses most valuable resources and warrant effort to ensure they are effectively utilised.
33 © Vital Business Solutions Pty Ltd (A.C.N ) Performance measures / metrics Information previously available only within projects will be available across the organisation. Management should use this to advantage. Metrics such as:- Billable ratio Billable rate Contribution rate Service levels Business activity revenues / costs / margins
34 © Vital Business Solutions Pty Ltd (A.C.N ) Management By Projects - systems
35 © Vital Business Solutions Pty Ltd (A.C.N ) Management by projects systems should- It should be simple to use Accessible by all stakeholders at all times Provide organisation wide visibility of project and resource data Implement structure to the business activities ie group all Software Maintenance projects Provide resource planning across the organisation Synchronise individuals resource schedules with project resource schedules Primary Management By Projects system requirements:
36 © Vital Business Solutions Pty Ltd (A.C.N ) Provide Performance Metrics both for forecasts and actuals Integrate with function or department type systems such as Help Desk Provide powerful project costing facilities and automated billing generation Provide Earned Value facilities to be able to report revenues, costs and margins on a period by period basis Manage internal and external resources (scheduling and costing) Cater for ad hoc as well as planned work Management by projects systems should- cont.
37 © Vital Business Solutions Pty Ltd (A.C.N ) Summary You are probably informally practising Management By Projects now Can be implemented in a stage approach - Management By Projects Project Management Resource Management Time Management etc People and systems are available to make it easy The payback is substantial Adoption is strategic for your organisation
©Ian Sommerville 2000Software Engineering, 6th edition. Chapter 4 Slide 1 Objectives l To introduce software project management and to describe its distinctive.
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