Presentation on theme: "Mission Oriented, Customer Focused"— Presentation transcript:
1Mission Oriented, Customer Focused Project ManagementThe world from the perspective of the Project/Program ManagerMission Oriented,Customer Focused
2Corporate MissionInformation Security and Training maintains a mission oriented team of talented professionals providing world class, customer focused support to the U.S. Government Interagency Team.IST is Mission Oriented and Customer Focused.Our talented employees enable our customers by focusing on top support and solutions2
3What is a PM The Manager of a Program or Project Responsible for Project PerformancePrimary Customer Interface for effortLeader of personnelAccountable for ultimate successResponsible for Resources, Risks, Schedule, cost, process and qualityEstablishes and achieves performance metricOwner of the businessIST Business represents an aggregate of individual projectsWithout Project revenue, there is no company. The Project is the center to our universeThe basic project life cycle includes business development, execution and closeoutMultiple Projects make a Program and more than 1 Program constitutes a business areaThe role of a Project Manager includes:1. The Manager of a Program or Project2. Responsibility for Project Performance3. Primary Customer interface4. Leader of personnel5. Accountable for Success6. Responsible for resourcing, risks, schedule, cost, process and quality7. Key interface for establishment and achievement of metrics8. Ultimate owner of the business3
4Roles and Responsibilities ResponsibilityProject ManagersMaintain Burn PlansStay Abreast of Growth OpsCoordinate New BusinessManages Contract PerformanceBusiness Area ManagersBid Opportunities ProperlyManage O/H effectivelyAudit Burn PlansMonitors/Audits Contract PerformanceBusiness DevelopersMaintain valid strategic BD PlansIdentifies and Captures New BusinessCoordinates directly with all ManagersMaintain Corporate Growth PlansBusiness ManagementActively Participate in BidsCompile and Maintains Data – Status PlanAdvise/Counsel Managers on O/HProvides independent Contract ReviewExecutive ManagementManages to established Division/Group MetricsDirects overall strategy for growthMaintains Profit and LossUltimate Responsible for overall PerformanceAnnualBudgetPlanManage To MetricsAccurate Burn PlansKeep Contracts SoldLabor RatesGrowth #’s - Existing ClientsProvide O/H InputsNew Customer NumbersOpportunity ROICombined B&P EstimatesFrom a global perspective within the business, you can see the basic construct of levels from project to executive management.Responsibilities and roles move from support to ownership as the level of management increasesAlthough not all functions are progressive in responsibility, each area has a contribution to the big picture and annual planAs examples:Business Developers – sell performance, support customers and coordinate with other functionsBusiness Managers – Provide support to PMs in coordinating cost, resources, affordability, analysis, project visibilityBusiness Area Managers – Provide direct leadership and resource support across multiple projects and supports the PMExecutive Managers – Forecast the annual year and beyond, estimating needs, customers, budgets and support tools and needsAll roles are from the perspective of the business and assume quality assurance has a global responsibility.Organize/Validate All BudgetsPrepare then Status PlansO/H, Profit, Revenue HistoryValidate Approve BudgetsApplication of Strategic HiresOverall AccountabilityQuality
5Acquisition Life Cycle FeedbackLessons LearnedAcquisition Life CycleSelectionMarketDevelopRFPAwardExecutionCloseMarketing MgrBD MgrCapture MgrProject ManagerResourcesROM BudgetROM BOERefined BudgetTentative BOEInitial Burn PlanEPR PackageBudgetBOEBaselineBurn PlanEPR PckgBudgetFinalize WBSVerify BOEValidate BaselineFinal Burn PlanCreate IWAMonitor BudgetMonitor WBSValidate BOEStatus BaselineMaintain BurnUpdate IWAPlanning is the key to success*As a project manager, it’s important to understand the total business life cycle, not just project execution.*60-70% of the acquisition life cycle often occurs prior to the actual project award with intensive strategy and planning*By using experience, past performance and strategies, we enable our Marketing and BD team to target opportunities that fit, well in advanceMarketing Who are we really. A simple question but sometimes difficult to answer. The majority of business is captured based on who we are, what we do and how we perform. Literature, websites, PR and marketing materials should evolve and reflect our business today coupled with a a vision for the future, funding and the marketplace. PM’s must feed Marketing to validate the approaches and clarify the intended market, products and technologies for business pursuits.Business Development creates long range plans with support of technical personnel, business managers and executive management- ROM estimates are created from existing successful projects, PM inputs and technical approaches/complexities- BD engages the customer to identify the “problem statement” and interface between user and the company for solutions- BD provides initial concepts, estimates, competition, technologies, risks and issues to the operations and technical teams- BD identifies budgets, key customer personnel, stakeholders, obstacles, timelines, teammates and strategiesCapture Management begins the process of transferring a BD engagement to become a proposal and response. Often capture managers are future project owners and assist the business development team in selling the opportunity to executive management for investment to win.- CM translates BD items to project management and provides customer perspective- CM supports BD in establishing a “bid/no-bid” decision based on objective facts and data to support corporate investment- CM facilitates during the proposal providing interface between proposal stakeholders, proposal managers and executivesProject Management assists in basis of estimates, technical approach and project viability. During initial marketing and BD phases, the project manager provides past performance, knowledge of the environment, metrics, ROM Cost, timelines and relevant data in support. Information is typically broad and non-binding to assist the shaping of a future project.As opportunities mature towards capture, involvement increases from the PM ultimately assisting in Basis of Estimates, work breakdown, budgeting, return on investment reviews and risk.During Capture and Proposal PM’s provide direct proposal support facilitating solutions, alternatives, options, costing, scheduling, risks, teaming decision support, lessons learned and technical approach. Often PMs coordinate the writing of proposals and author the Program Management Plan tailoring existing processes and procedures to the specific project work.During Execution, the Program Manager takes on the responsibilities as prescribed earlier and documents, reports, manages and controls to achieve the project objectives in concert with the technical team (depending on projectized or functional organizations).During Closeout, the PM documents all project areas and produces both a lessons learned and past performance while interfacing with all key personnel to insure completeness and unbiased data. The information is used by BD for future efforts, Capture Managers for Proposals and ongoing project managers and technical personnel on existing contracts.Business Area MgrAdministrationFinanceBusiness DeveloperOperations ManagerContractsSubcontracts
6Typical Company Organization CEO/PresidentBusiness OperationsProgram ManagementBusiness ManagementHuman ResourcesAdministrationRecruitingBenefitsCompensationEmployee RelationsPublic RelationsCorporate LegalPerformance ReviewsFinance/CPACost AccountingAccounts ReceivableAccounts PayableTime CollectionReport GenerationContractsSubcontractsBusiness Development
7Company Resource Associations HumanResourcesComplianceCompensation/BenefitsPerformance ReviewsRecruiting/SourcingRelationsContractsFinancePrimary Contract InterfaceLegal representativeMonitors ComplianceAdministers ContractProcesses Time CardsProvides ActualsMonitors the moneyProduces independent dataProgram ManagerRepresents Company to CustomerPlans and Executes ProjectIdentifies Resource NeedsManages RequirementsGathers and provides true statusDocuments and Manages RiskCommunicates progress and statusIf a PM is the center of the universe, they need support to be effectiveThe company provides resources to support the primary functions outside of the project to enable the PM to performThe list of Corporate Functions is not intended to exclude Subject Matter Expertise (SME) or Technical ManagementEach Corporate Function supports the PM and is an Enabler to the ultimate successBusiness AreaManagerProgramControlProvides Qualified ResourcesEnforces Metrics AchievementReceives and reviews timelyEnsures compliance to policiesMonitors BaselinesTracks Earned ValueProvides objective statusModels alternatives
8Contracts/PM Interaction • Everything associated with / affecting contractual instrumentis worked by Contracts Dept.• Contracts Dept. supports formal procurement contracts• Contracts Dept. responsible for subcontract issuance and mods• PM is responsible for execution & subcontract management.PM must support the Contracts DepartmentAs a Program Manager, Business and Project Execution is definitely a focus however, the formal obligation of the corporation is a contracts functionThe PM supports contracts in identifying procurement needs, modifications and other contractual transactionsContracts and Subcontracts are ultimately responsible to executive management to legally obligate the corporation to both customers and subcontractors.Some items that traditionally run through Contracts/Subcontracts are:Teaming AgreementsRequest for QuotesRequest for ProposalContract AwardSubcontract AwardsOfficial Notifications and CommunicationsContract or Subcontract ModificationsOfficial Pricing* Program Managers cannot contractually obligate the company
9Company<–>Government Interfaces ACO(Administrating Contract Officer)PCO(Procuring Contract Officer)COTR(Contracting Officers’Technical Representative)• Post awardadministration• Administerchanges• ComplianceDelegatesduties afteraward• Negotiates• Obligates theGovernment(signs)• Technical direction• Technical directives- Inspection- AcceptanceThe focal contractual contact for the PM in executing contracts is the contracting officers technical representative or (COTR)The COTR is a counterpart to your role as a PM and may also be known as a Government Program ManagerDay to day contact, communication and interface for the PM would occur with the COTR to drive the ProjectAll required transactions of an official nature would be coordinated with the COTR but executed via the Contracting Interface with the govt.Company accounting / contractsCompany PM
10Typical Product Project Relationships Project ManagerDelivery Order 2Delivery Order 1IDIDTechnicalManagerGraphicsGraphicsCORECOREProductionProgrammersProgrammersOrganizational Structures can be Functional, Project, or MixedTraditionally IST has a Mixed StructureProject Managers coordinate with the customer and work with technical managers to accomplish the taskTechnical Managers and Leads orient resources and personnel to accomplish the task with the project schedule and timeIt is not uncommon to have more than 1 project or task/delivery order under one project managerPMs and TMs work closely together to define the requirements, needs, risks, schedule and costs for workQualitySMESMEEditing“To succeed we must view contracts from the world of the Project Manager”
11PM Performance Expectations Know what was bidRead and understand the SOWUnderstand the riskKnow the contract value and basis of estimateKnow where you are (Operational Awareness)Prepare and follow a baseline and project planManage the risksKnow the cost and scheduleEstablish MilestonesIdentify and Manage resourcesRepresent the companyCommunicate with the customerEstablish and manage expectationsProvide timely and objective statusKnow your limitationsKnow when to escalate to managementLead personnelAs the Manager for a work effort you are the authority and ultimately responsible for successful execution.
12How to ”fail” as a PMDo not plan the work before you start or allow chargesFail to record & communicate performance milestonesDo not read and understand SOW/RequirementsBelieve your customer knows what’s rightDo not document your concerns early --“risk”Do not establish status meetings and PMRsBelieve the problem will go away with timeDo not manage and communicate metricsNeglect to provide regimented statusDo not properly document acceptanceDo not track action items and closureMake excuses for productivity
13Financial Performance Measures MetricsProfitAfter G&A TaxAfter Costs RemovedOverheadCost of LaborFringe BenefitsLeaseOther: Travel, MaterialsRevenueGrowthStabilityBacklog10% Minimum80% Site*50% Customer** O/H Rates are Examples OnlyA program manager is ultimately responsible for the performance of the work. In concert with the business area manager, goals for O/H, Revenue and Profit are typically shared. The theory is that if contracts are bid properly and the PM is involved, the project and the business area can operate within the established metrics. To the PM, G&A is typically seen as a tax and can not likely be influenced greatly during planning or execution other than to request R&D funding or procurement of Corporate Level tools that might globally benefit the company and your project.Profit and Loss Responsibility:As work is bid, the PM takes an active part in determining overall cost of performance and works with technical personnel, executives and business management to establish pricing.Estimates combine established G&A tax with estimates of indirect expense and costs associated with the direct contractSome items within O/H cost can be adjusted while others (fringe for instance) are % based estimatesBy being involved in the proposal price, the contract is set to achieve established O/H, G&A and Profit goals from the beginningGrowth and New Business:By maximizing the contract and work, it is the goal to keep sold existing business with existing customersIn addition, identifying ways to grow with that customer or similar customers is also anticipatedBy selling “performance” and relating it to ongoing successful contracts, expansion and growth is possibleBy setting, measuring and delivering within established metrics, the project and business will be afforded better visibility and awareness as well as increase the likelihood of overall success.20% Growth
14Typical PM Profitability Project <10% Profit on noticeProject Mgr documents return to green planWeekly meetings with key personnel to statusPublic presentation to executive managementTeam placed under close observationProjects <7% Profit on probationProject Mgr documents “crash plan” to recoverProject Mgr presents critical path, risks & mitigationsWeekly meetings with ALL team personnelMandatory Overtime InstitutedProjects <5% Profit unacceptableProgram Manager provides accountable leadership to projectExecutive Mgmt/Program Management rebaselines projectCritical path documented and options analyzed for efficiencyR-examination of all Team Resources, Utilization, Metrics, ProgressMandatory Overtime
15Functional Philosophy Business DevelopmentStrategic Plans Customer LiaisonPast Performance Capture MgmtMarket Approach Teaming/PartnersTechnology Trends Strategic HiresPlanningBidsWBSBOEs-BudgetingForecastingLessons LearnedExecution MgmtRequirements Mgmt-Customer MgmtEarned Value MgmtResource PlanningSchedule MgmtSubcontractsStatus and reportingProductionProcess ControlAdherence to SchedulesQuality AssuranceSystems Approach to MgmtConfiguration ManagementAdherence to budgetsForecasting of resourcesProductivity/UtilizationOperations MgmtPricing/Bids - Financial StatusBudgets - Profit RealizationPlanning - Financial BaselinesMaintaining annual and strategic plansSubcontractsCompleteWorking Now
16Operational Goals Deliver!!! Milestones and Metrics established and trackedImprove Communication at all levelsEnforce Operational ProcessContinue to refine Technical ApproachClearly define all roles/responsibilitiesCustomer SatisfactionCompliance
18Managing Cost 101 Plan and Propose Work Effectively Establish Productive Work PlanDocument and Manage RiskManage requirements early in the projectManage performance with Earned ValueEnhance Hiring Practices – Productive PeopleOutsource where Sensible (CLOCs)Leverage full depth IST ResourcesPerform Make-Buy to reduce riskMonitor and Manage Dept. Resource Plans“No-Bid” High Risk OpportunitiesOverhead Conscious – Quality FY Budget Inputs
20Cost Pools & Colors of Money 15%General & AdminDirect ContractG&A salariesG&A Facility CostG&A benefitsB&PIR&DSalaries ofEmployeesChargingto aContract60%3%90%OH Contractor SiteMaterial HandlingOH Customer siteFacility CostBenefitsComputerManagementBuyer SalariesSub-contractManagementBenefitsComputersFacilitiesManagement* All % above are examples only
21Contract Performers Paid through accounts payable Consultant• Treated assubcontractor• ConsultantAgreementContract Labor (On-Call)• No BenefitsFull TimeEmployee• Full BenefitsMust be 32 hoursPer week or moreSubcontractor• SubcontractPaid through accounts payable[No Burdenable Labor]Paid through payroll system[Burdenable Labor]
22Typical Site O/H Cost Pool Example Company Site Rate 80%Fringe Benefits %Bonus %Overhead Managerial Labor 8.5%Benefits on OH Labor 1.5%Rent %Depreciation 4.8%Travel %Communications/Telecom 3.6%Computer Expense 2.9%Other (misc) 7.6%80.0%36.5%* O/H % rates are examples only
23Typical Customer O/H Cost Pool Example Customer Site Rate 50%Fringe Benefits %Bonus %Overhead Managerial Labor 8.5%Benefits on OH Labor 1.5%Travel %Other %50.0%36.5%
24EVM TerminologyContract Value (C/V) – Total Contract Worth (Labor+Travel+Material)Estimate to Complete (ETC) – Cost to complete the work effortInception to Date (ITD) – How much is spent to date on the effortEstimate At Complete (EAC) – Total cost of effort when doneBudget at Complete (BAC) – Funding left when finished (profit)Variance – How much you are ahead or behind the budgeted plan or baselineBurn Rate – The monthly amount that the project is accumulating cost
25How a Basic Labor Rate is Built Employee Salary = $50,000Hourly Equivalent = $24.04Contractor O/H (80%) = $19.23G&A (15% of Cum) = $ 6.49Total Burdened = $49.76Profit (10%) = $4.97Total Customer HR Sell = $54.73$43.27
26Creating Productive Labor Bids Scenario 1: Full Time Employee has 2 Weeks Vacation is 5 days sickAnnual HoursHoliday HoursVacation HoursSick TimeProductive HoursScenario 2: Full Time Employee has 3 Weeks Vacation takes no sickAnnual Hours 2080Holiday HoursVacation HoursSick TimeProductive HoursPaid Time Off (PTO)Work Effort Value:$ x = $102,892.40Paid Time Off (PTO)Work Effort Value:$ x = $101,797.80
27Overhead Components Contract Revenue Overhead Labor Non-Labor Costs Direct Labor On Contractor SiteOverhead LaborIndirect LaborFringe Benefits on Indirect LaborNon-Labor CostsRentFringe on Direct LaborCompany AllocationTelecomRecruitingComputersRelocationSign on BonusCombined OH / Direct Labor = Overhead Rate80% is an Example O/H Target
28Profit and Contract Type T&MFFP Labor HoursFixedPriceCost PlusCan’t affect profit much!Goal = 10% on ContractDecisions:Hire to maximize profit?Hire to maximize customer satisfaction?Hire a key employee at a loss?Lose money on small T.O. to get foot in the door?Bid some labor categories at a loss?Goal = 15%Decisions:Minimize execution riskManagement reserveUse Divisions OH ratePlan for follow onNot Typical Culture!Yes, but must stay profitable!Yes, Sometimes!Yes, Sometimes!Yes, if necessary to win butmust obtain overall profit.
31Know What We Bid Break Work Down (WBS) into logical segments Validate IMI Hours against analysisEnforce Technical Personnel InvolvementIf Sub Work, Request Plans and BasisBurn Plans created w/ “Like” ResourcesUnique resources clearly identifiedRisks Documented with MitigationsFormal Bid Sign-Off AccomplishedMaintain artifacts in a project folder
32Work Breakdown Structures Segmented & severable items of work when linked together create steps to completing a project.Each work section has a measurable item and artifact that proves the effort has been performed and completed.When associating a budget to an item of work within a WBS you can determine performance against the plan.WBS elements are loaded into the cost system and become the financial baseline for the project. Separate Work Packages are established for each segment of work to accumulate costs and understand progress.Project XLaborArtifactsResourcesScopeScheduleWABurn PlanMgmt PlanSubcontract PlansRisk PlanDeliverablesCommunicationPM = 80 HoursTM = 80 HoursQA = 20 HoursLead = 20 Hours2 Weeks200 Hours$13,000 Max.Complexity = 3SubordinateWork Package 1PlanningFront EndAnalysisSubordinateWork Package 2(Example)SubordinateWork Package 3DesignSubordinateWork Package 4Production
33Cost AccountingWe Won! - REQUIRING approved budget baselines prior to opening work package:Final Burn Plan w/ staffing & accurate ratesWork Authorization updated/completeWBS and BOE’s validated & archivedFinancial Baseline reviewed & approvedProject MgrProgram MgrOperations MgrContractingFinanceBudget Turn-on ProcessPreparePackagePMApprovalsOpsValidationOpenBudgets* This process provides a control by requiring completed planning documentation.
34What’s a Work Authorization (WA) Authorization for someone to work your project.Must be Maintained by the Project Manager.Is communicated to the Time Card SystemIs auditable and MANDATORY.Utilized for every cost account whether direct or indirect to identify personnel authorized to work the project.Feeds the Burn Plans and is used by Program Administration to validate resources on projects.
35Project Burn Plans What they are: What they are not: A baseline resource plan with hours and ratesAn estimate and projection of work in financial viewA model to understand “what ifs?”A tool for understanding profitability vs. costA way to assist business area managers with staffingWhat they are not:A system for performance measurement (no metrics)A guarantee of successAn event driven view of your project
36Project/Job Status Reports (JSR) What they are:Generated by Corporate Finance MonthlyActuals generated on each cost accountUsed to validate burn plans and verify costsProvides objective evidence of financial positionDoesn’t currently articulate “performance”
37Internal Monthly Status 4Review1 Week3Owner: BM/VPAction: Cost ReviewAction: PM ReviewAction: O/H ReviewInput: Final Burn PlansInput: Status ChartsOutput: Action PlansOutput: CFO DataOutput: Status to PlanSummary2Owner: BMAction: Summary StatusAction: Issues/ResolutionsAction: Incorporate O/HInput: Validated Burn PlansInput: Recovery Plan WordsOutput: SBU Status ReportOutput: Recovery ApproachesValidateOwner: PMAction: Update ProjectionsAction: Validate BaselineInput: Updated Burn PlanOutput: Validated Burn PlanOutput: Recovery Plans1To understand our independent status, it’s important that we review cost, schedule and performance regularlyThe trigger for cost is the official close of cost reporting month including all direct and indirect labor, subcontractors, purchases and travel1. Upon closure of the month, Business Management produces Final Invoices, Status Reports and Cost Data for the program managerProgram Managers examine and validate cost information against financial baselines and performance to determine true statusUpdate Projections Against with Actuals vs. PredictedDetermine schedule and performance to scheduleDefine actions for future and update risks3. Upon update, PM’s Meet with the Business Manager to discuss, document true statusAssess Red Yellow Green StatusDiscuss alternatives to make plan and optionsUpdate budget projections, schedule and performance planCorporate Area Review with BM, PMs and ExecutivesA monthly cost review is held by Business ManagementEach program manager discusses EVM, Risks and statusAs required each PM discusses action plans if a key metric is not being achievedCUSTOMER: Upon completion of the basic steps, validated data and information is provided either synchronously or asynchronously to the customer in a few possible ways:Monthly or Quarterly IPR or other customer required ReviewsGeneration of a monthly reportData provided via a wide are work flow system, portal or integrated data environmentUpdateGoal:Provide Validated StatusAll stakeholders w/ same storyControlled AwarenessProgress against the FY planOwner: BMAction: Create StatusInput: JSRsInput: ModificationsInput: Sub InvoicesOutput: Updated Burn PlanOutput: Potential Problems
38Example Business Unit Summary 20102011D001$1,345,592behind sched70% Spent95% CompleteJASONDJFMAMJJASOND28 FebD001$639,046Revised Plan10% Spent10% Complete31 DecD003$1,892,223$267K Subs11 Feb23 Feb22 Jun17 Aug12 OctNew Sub Added50% SpentCAI/TMICAITMI30 MayD004$848,044% Complete45% Spent60% Complete19 NovD005$826,607Slow Start15% Spent10% Complete19 MayJul 10/06D006$1,386,000New Project0% CompleteJust Started
39Maintaining Plan Required enforcement measures: Planning Documents use to measure progressNew Hires must be qualified for positionsH/R Reqs must include cost accountsSubcontract rates will be continuously validatedBaseline Changes require contract modificationsWork Authorizations MaintainedChanges impacting Corporate established targets require approval by management
40Example: 4 Part Chart Contract 80000 (Example) Cost PerformanceCV $802KCV% 53%Schedule% 36%CPI Future FutureSPI Future FutureTCPI(EAC) FutureITD (spent) 428KETC (remaining) 98KEAC (total) 526KVAC (variance) 277KMonthly Burn Rate 33KGoal: Deliver within budgetPeriod of Performance: 6/19/10 – 8/18/11Owner: Frank LusterSTATUSMajor Schedule Variances:Issues:Contract Performance – Slow start may push delivery slips.Effort not local Requires local Lead and oversight.Task Lead/Management Changes have diluted history and financial information from past not clear.Action Plans:Aggressive r Mgmt involvement shifting some personnel to optimize performance.Continuous customer communication and involvement on site in Ft. Sill OK Jan 20Major Cost Variances:Top Risks:Contract Performance and delivery of courseware within current schedule.Cost Control for delivery without unanticipated cost growthCustomer expectations managed to avoid schedule/cost growth.Action Plan:PM, TM and BM Involvement on site and with customer to establish new schedules, cost baseline and monitor major milestones on critical path. Jan 31Period of performance extension implemented need toComplete Remaining Efforts quickly. May 05Accurate and Independent By-Project Status Reporting is important both internally and externallyKey Elements of solid reporting methodology would include:Planned CostPlanned SchedulePlanned Deliverables/MeasurementsPlanned Risks MitigationsActual CostActual ScheduleDelivered items with proof of measurementRisk StatusAnalysis of Planned vs. Actual to provide ongoing visibility and variancesThis visual is one method of assembling and maintaining monthly statusIt provides a 4 quadrant data package that relays all general information regarding the projectData is assembled from Finance, Scheduling, Customer Communications, Delivery and Program ManagementExamples of data elements are included to provide a conceptual Quad Chart.The charts are presented by project in a monthly cost review
42Why do we need a budget Provides Stability & Focus Key Inputs Raises Vision and GoalsHistorical DataWork BacklogBD PipelinesMarketplace InfoCompetitionInvestment/ResourcesRaisesThe Valueof theCompanyProvidesStability &FocusSuccessful Companies:Create a Legitimate PlanMaintain/Status the PlanAdapt/Evolve the PlanProject the Plan ForwardBudgeting and Planning is important at all levels, it assists in establishing the confidence today and provides key inputs for alignment in the futureSuccessful organizations develop independent status against the current operating plan and additionally look years for to establish a path aheadKey Items that constitute a strategic plan and budget are:Vision and GoalsHistory of customers, resources, performance, and budgetsBacklog of existing work and “keep sold”Business Development Pipelines and plans for growthThe view of the marketplace including operational environment, funding, needs, climateCompetition in the market spaceInvestments and Resources Required* Without input from the bottom up, the plan becomes a corporate level vision only.
43What’s a Profit Center Measured Business Area/Unit Has Own Overhead PoolPossesses Direct Bill ContractsHas Revenue and ProfitContributes M/H and G&AMay have leasesHas Prescribed Corporate MetricsProfitOverheadG&AM/HRevenueFor overall business awareness and control, individual centers can be established, depending on a number of factors:Size of the businessLocation of the business (geographically separated)Unique cost, investments, resources or expenses that relate to the specific area of workSpecific Customer Service or Product that can be clearly defined from other businessA newly awarded long range contract that has significant impact on the corporate bottom lineA merged or acquired business unit that could have incompatible G&A, O/H and Profit metricsIn most cases, a business unit has a minimum mass of business to become stable and healthy as a centerAnalysis is generally performed on the business and a model built to determine viability, minimum mass and variances to achieve corporate goalsTypically an owner of a center has Profit and Loss responsibility coupled with annual planning, growth and indirect accountabilityProfit Center*Generally a business unit is aligned to customer, geographic area, or business line.
44Composite Overhead Example Total Company (1M)01.100Customer SiteContractor SiteMonthly Revenue: $1.02MMonthly Profit (9%): $76.2KFY Projected: $12.3MFY Project Profit: 914KProfit down due to O/H– Virginia Beach– Virginia BeachDirect 8.27KCosts 5.13KDirect 9.96KCosts 9.41K62.0%94.50%ArlingtonArlingtonDirect KCosts 5.83KDirect 99.1KCosts K55.4%86.50%Direct = KCosts = KCust Rate %YTD Avg = 54.1%Direct = 263KCosts = KIDSI Rate 80.69%YTD Avg= 80.7%ChesapeakeChesapeakeDirect KCosts KDirect 4.54KCosts 3.57K53.25%78.60%At the corporate level, a composite view of a larger business could look like thisThis visual represents a combined Customer and Contractor site business unit/profit centerMultiple projects, customers or task orders can be associated with each departmentThe model shows 5 separate department level centers with segmented revenue, overhead and expensesReports are generated at the department and corporate level for total visibilityAn annual plan is created starting from project-department-division-group and the financial baseline established and approved corporatelyPerformance against the baseline is measured on a monthly basis– Indiana110 Personnel489.88K DL333.29K O/H823.17M Total123.47K G&A946.64K Burdened– IndianaDirect KCosts KDirect 95.2KCosts K48.54%77.82%– Tampa– TampaDirect KCosts KDirect 54.2KCosts K53.86%72.76%
45ID/IQ Team Formation Assessment Phase Determine Capability Gaps Assess Our Team CapabilityExploreOutside SourcesOrganizationPhaseEstablishTeamAssembleFinal TeamDetermineApproachResponsePhaseTechnical ResponseBestPriceSubmitResponseTeam Formation assumes that a business development pipeline and forecast has been established and that some level of Marketing/Outreach has occurred that might provide the ability to “pre-assemble” the team and “pre-qualify” them based on performance, skills customers services or capabilities.
46Risk RISK RATING High Certainty 5 M H L Highly Likely 4 Likely 3 Unlikely2Program Mangers are responsible for identification and ownership of risks in a Program or ProjectEarly risk identification is critical to allow for the maximum opportunity for management- The goal is to identify and document risk prior to award (During BD or RFP Phase)- Risks can be identified at any time during program executionRisks are objectively assessed- Establish a degree of severity or consequence- Determination of the likelihood it could happenRisks should be labeled and a rating established- Ratings can be established by plotted both X and Y axes,- The Resultant Rating determined from the matrix will be a number letter combination (i.e 4c)- Each risk is compared and prioritized and also determined whether interrelationships exist between risksThrough a combination of discussions with SMEs, lessons learned, PM Team and customer meetings, mitigations are determinedThe goal is to mitigate and manage all risks and avoid High Risk items- All Risks are documented, reported and monitored- Individual Action plans are created for each individual risk item- Risks are discussed during internal team meetings and on a monthly basis at Program Management ReviewsUpon Project or Program Completion, Risks are documented as part of the closeout phase and added to lessons learnedRemote1MinimalaMinorbModeratecModerateSignificantdSevereeConsequence
47The Way AheadAt IST we pride ourselves on customer satisfaction the first time, every time. When you partner with IST, we mesh your vision and supporting concepts with our innovative approaches to provide world class products and services. You communicate directly with our management team which translates to more customer satisfaction and value returned for your investment. We are ready to team with you now to provide leading edge solutions to your 21st Century challenges.