Project Management for Purchasing Managers Paul Lewis MA, MBA, PMP ® Manager, Project Management Office February 11, 2010 / NAPM-Utah

Introduction Paul Lewis, MA, MBA, PMP ® Last 6 years implementing projects and the ARUP Project Management Office Over 180 hours classroom training in PM from Project Management Institute (PMI), Milestone Management Over 1,000 hours teaching PM to ARUP and others 6 years prior involved in ARUP Strategic Planning Focus on continuous quality improvement (CQI), communications, change management, and new programs implementation Small business entrepreneur PM for Purchasers Feb 11, 2010 NAPM-Utah

Success in Projects Project Management Equation for Success: S = (20% Tools + 80% People) Energy Therefore, Collaborative Model—dependent on people skills Requires support (Energy) from sponsor, the project team, and a cultural desire for project success PM for Purchasers Feb 11, 2010 NAPM-Utah

Success in Projects Strategic Change (Goals\Initiatives) Projects Strategic Planning Operational Activities Monitoring Measures PM for Purchasers Feb 11, 2010 NAPM-Utah

Project Failures Why Do Projects Fail? Poor planning (both outside and inside the project) Inadequate or inefficient resources Accountability deficit Cultural barriers Lack of clarity—objectives, purpose, requirements "You've got to be very careful if you don't know where you're going, because you might not get there.” —Yogi Berra PM for Purchasers Feb 11, 2010 NAPM-Utah

Project Failures The Pain Curve Pain Time Good Planning Poor Planning PM for Purchasers Feb 11, 2010 NAPM-Utah

Project Management Framework 5 Process Groups (Phases) 9 Knowledge Areas (Disciplines) Applied tools, methods, and process Interpersonal and leadership skills Industry and organizational knowledge Experience and expert advice Menu of 42 Total Processes PM for Purchasers Feb 11, 2010 NAPM-Utah

Important Jargon Project: A temporary endeavor undertaken to create a unique product, service, or result. Has an end date Unique – something never done before in this same way Temporary Resource Team – comprised of skilled resources borrowed from their regular job duties to focus on the project PM for Purchasers Feb 11, 2010 NAPM-Utah

Important Jargon Project Management: The application of knowledge, skills, tools, and techniques to project activities to meet project requirements. Identifying requirements Establish clear and achievable objectives Balancing demands of cost, scope, calendar, and quality Adapting to changing stakeholder expectations (value delivery) PM for Purchasers Feb 11, 2010 NAPM-Utah

Important Jargon Project Manager: Individual assigned to achieve project objectives. Project Sponsor: Individual who provides financial resources needed to achieve project objectives. Project Management Office (PMO): Centralized and coordinated management of projects. May directly manage projects, offer support, or both. PM for Purchasers Feb 11, 2010 NAPM-Utah

Important Jargon Project Scope: Work that must be performed to deliver the product, service, or result with specified features and functions. Project Budget: Approved estimate for the project, any component of work, or scheduled activity. Progressive Elaboration: Planning in steps and continuing by increments Plan is broadly described early in project, becoming more detailed as knowledge and understanding of project outcomes improves. PM for Purchasers Feb 11, 2010 NAPM-Utah

Project Management Process Basic Project Management Process Release 1 Release 3Release 2 Multi Phase Software Development PM for Purchasers Feb 11, 2010 NAPM-Utah

Project Management Process New Building or Facility PM for Purchasers Feb 11, 2010 NAPM-Utah

Project Management Process NOW PM for Purchasers Feb 11, 2010 NAPM-Utah

1.Project Integration 2.Scope 3.Time 4.Cost 5.Quality 6.Human Resources 7.Communications 8.Risk Planning 9.Procurement PM Knowledge Areas PM for Purchasers Feb 11, 2010 NAPM-Utah

Planning Phase 1.Estimate Costs : Approximating monetary resources needed to complete project activities 2.Determine Budget : Estimating costs of individual activities or work packages to establish authorized baseline (Budget) Executing Phase 3.Control Costs : Tracking expenses and updating cost baseline as needed Cost Management Processes PM for Purchasers Feb 11, 2010 NAPM-Utah

Procurement Mgt Processes Planning Phase 1.Plan : Documenting approach and decisions, identifying potential sellers Executing Phase 2.Conduct : Obtaining seller responses, selecting seller, and awarding contract Monitoring and Controlling Phase 3.Administer : Managing procurement relationships, monitoring contract performance, changing contracts as needed Closing Phase 4.Close : Completing each project procurement PM for Purchasers Feb 11, 2010 NAPM-Utah

Risk Planning 1.Identify risks 2.Qualify & prioritize risks 3.Plan appropriate Risk Response Mitigation Strategies Contingency Reserves 4.Monitor and Control Risk Reserves Allocated resources for risk contingency responses Risk Planning Processes 1.Passively accept 2.Avoid 3.Transfer 4.Reduce likelihood or probability preemptively - Mitigation 5.Actively accept & respond after trigger - Contingency Common Risk Responses PM for Purchasers Feb 11, 2010 NAPM-Utah

Key Elements to Success 1.Project Charters 2.Scope Documents – definition and verification 3.Activity and Change Tracking 4.Project Summary / Lessons Learned PM for Purchasers Feb 11, 2010 NAPM-Utah

Key Elements to Success 1.Project Charter: Document that formally authorizes a project and documents the initial requirements to satisfy stakeholders’ needs and expectations PM for Purchasers Feb 11, 2010 NAPM-Utah

Key Elements to Success 2.Scope Documents: 1.Statement of Work (SOW) & Business Case 2.Project Scope Statement 3.Work Breakdown Structure (WBS) 4.Scope verification metrics 5.Scope change tracking PM for Purchasers Feb 11, 2010 NAPM-Utah

Key Elements to Success Work Breakdown Structure PM for Purchasers Feb 11, 2010 NAPM-Utah

Key Elements to Success Find a tool that’s easy to use Track only what you need –Requirements Only track what adds value Start with the basics –Tasks –Expenses –Labor Keep track of changes to all baselines 3. Activity and Change Tracking: PM for Purchasers Feb 11, 2010 NAPM-Utah

Key Elements to Success PM for Purchasers Feb 11, 2010 NAPM-Utah

Key Elements to Success 4.Project Summary / Lessons Learned Take advantage of your 20 / 20 hindsight: 1.What would you keep the same? 2.What would you change? 3.What were the biggest challenges? 4.What were your successes? Requiring signoff improves visibility PM for Purchasers Feb 11, 2010 NAPM-Utah

Projectizing Procurement How are procurement efforts like Projects? PROJECT:PlanExecuteMonitor & ControlClose PROCUREMENT:PlanConductAdministerClose Initiate: Chartering, Building of the Business Case, Approving expenditures Plan : Documenting approach and decisions, identifying potential sellers Conduct : Obtaining seller responses, selecting seller, and awarding contract Administer : Managing procurement relationships, monitoring contract performance, changing contracts as needed Close : Completing each project procurement PM for Purchasers Feb 11, 2010 NAPM-Utah

Improving Project Success 1.Don’t start until you have a signed Project Charter 2.Ensure you understand objectives, requirements, and expected outcomes before creating your Project Plan 3.Ensure you can deal with changes—have a change control plan before you start your project 4.Require signoffs (actual signatures) on all milestones 5.Plan your communication—who, when, and what method 6.Pick your Project Team carefully 7.Don’t ignore risk—keep checking through the project PM for Purchasers Feb 11, 2010 NAPM-Utah

Improving Project Success 8.Be honest and up front with information 9.Rely on internal processes that already work well—QA policies, Purchasing dept, key individuals, etc. 10.Keep track of yourself and your processes—you’ll see endless improvement opportunities 11.Learn from your failures PM for Purchasers Feb 11, 2010 NAPM-Utah

Where Should I Start? 1.Formalize the definition of a Project (Policy) 2.Formalize what’s required to know about projects before starting, before ending, and before spending 3.Formalize required tracking and communications for projects 4.Formalize project approval (funding) and closure processes 5.Begin implementing project level best practices PM for Purchasers Feb 11, 2010 NAPM-Utah

Professional Resources Project Management Institute: – –Local chapter luncheons –Training and certification Local educational offerings: –Local universities professional education programs –Consulting firms Online resources: –Synergy Professional Services: –Gantthead.com: PM for Purchasers Feb 11, 2010 NAPM-Utah

Questions?