Determining Business Value for Projects

I wrote this for a client today and thought maybe others would find value in this.  Hope it helps!

The key to understanding the business value of projects is to look beyond our standard metrics. Additionally, we will want to create measurements or metrics that will score projects in an objective versus subjective way while still allowing subjectivity to play a role. Sound confusing? It is! Our role as the Portfolio Management Committee is to break down the projects and create selection criteria to do our best to ensure that we are working on the right projects at the right time. However, the scoring and selection should be a guideline as to which projects should be completed instead of the hard and fast rule. The first thing we need to throw out is the generic definition of a project. It can't be as widely scoped as "anything over 40 hours" or "2 or more departments should be involved." It needs to be flexible enough that it encompasses many factors, but not so simple that every initiative becomes a project.


So how do we define what the measurement criteria should be? This is an iterative process that will take some time, but here are the first few questions we all should answer:

Overall Value for Entire Organization - What metrics can we create that would show the overall value to the entire organization? What is something today that crosses the whole organization and what does it do?

Overall Value for Department - Internally, there should be a measurement of how it fits the goals, directives, and compliance/regulatory initiatives for the department

Overall Value for Customer - How will this affect our customer base? What could we ask to track this?

Financial - What is the cost of the entire project? What is the cost of the alternatives? Return on Investment? Net Present Value? Internal Rate of Return? Payback Period?

Department Ranking - What is the rank of this project if they had to pick the most important to the least important? This is a subjective measurement.

Overall Ranking - What is the rank of this project if they had to pick the most important to the least important over the entire organization? This is a subjective measurement.

Risk - What risk factors should we track?

Organizational Capacity - Do we have the capacity to do this project? When would we be able to pick the project up?

Overall Scoring Methodology - How do we classify and score all the above criteria to pick which projects we should do?

Override - If we pick one project with a lower score than another, what type of override policy should we require?

The above items should be discussed, agreed upon and scored.  Then the scoring should help determine the apples to apples business value

Valuing People

You will often hear me speak about the value of people.  The fact that I hate the term "Human Resources" is a dead giveaway.  I talk quite a bit about making sure that you are achieving the work/life balance and that people and their families are your greatest asset.

Another great asset to remember is your network and your friends.  You truly have no idea when or if you will need someone else's help and where that help will eminate.  I hear story after story about what a small world it is and how this person is tied to this person.  Have you ever tried to play "Six Degrees of Separation?"

Whenever I am asked for a favor or a recommendation, I try my best to lend my help.  You never know what it could lead to.  I have had huge contracts landed by simply replying to a question on a social networking site.  I have had many friends land positions at companies just because they asked someone for assistance.

This leads me to another conversation.  Those that close themselves off from this behavior.  Around the holidays, I am always nostalgic.  I have had a great deal of fantastic people drift in and out of my life.  Some relationships ended well, some did not.  However, every relationship was important to me.  I have learned something from just about everyone that I have ever met.  I overheard a conversation today about someone reaching out to a past relationship, only to be rebuffed.  The rebuttal was, "There is no need, it has been 20 years."

I am sure there are reasons and I am sure there is much more to the story.  However, it still made me think about the value of the people in my life.  Right, wrong, or indifferent, I am thankful for each of you that have ever taught me a lesson, shared an experience, or have given me the honor to call you a friend.  I value people, not our greatest resource, rather, our greatest asset.

No Day But Today,

Rick

The First Grade Lesson for the PMO Manager Search

I have had several conversations over the past week and a half with clients on the creation of a PMO.  I see this happen all of the time.  Companies want to have a PMO, but they are really not sure what they want the PMO to do.  Additionally, I get asked the question of whether to promote from within or hire externally for the PMO Manager.  I generally have two responses to this question:

1)  I think it is a cultural decision whether to promote from within or hire externally.  For the most part, the expertise can be found externally, but they have to learn the cultural and political land mines to navigate.  Internally, however, can sometimes just promote more of the same.  It may not bring the change companies are looking to make.

2)  To find a great PMO Manager, they are not necissarily your best project manager.  To breed change and to make an impact on the company culture, you need someone who is willing to color outside of the lines.  However, project managers have been taught to color inside the lines and ask for permission to let the color stray.  It becomes the age old debate of creativity versus functionality.

I do not think there are any right or wrong answers to this puzzle, except to say that companies must understand what they want the PMO to accomplish before embarking on this journey.  I will post much more on this topic in the coming weeks.

Rick

Date Compliance Check - Microsoft Project Formula

Here is a quick little formula that I developed that can help you keep an eye on your project's status.  I have some general rules for my project plans:

1) No manually typed dates
2) All tasks should have a predecessor
3) No past due start dates
4) No past due finish dates

To help with numbers 3 and 4, I have written the following formula:

IIf([% Complete]<100,Switch(([% Complete]=0 And (DateValue([Current Date])-DateValue([Start]))>0),1,((DateValue([Current Date])-DateValue([Finish]))<-5),3,(DateValue([Current Date])-DateValue([Finish]))>=-5 And (DateValue([Current Date])-DateValue([Finish]))<0,2,(DateValue([Current Date])-DateValue([Finish]))>=0,1),3)

If you open up Microsoft Project, insert a number field, and then right click the field and choose "Customize Fields," you will be able to select the "Formula" button and paste the formula in.  After you accept the entry, you can setup "Graphical Indicators" to show a Red "X" for the result of a 1, and a Green Flag for the result of a 2.

The results are as follows:

1 - The task has a past due start date and the task has not started or has a past due finish date and the % complete is not marked at 100.
2 - This task will be completing within the next 5 days.
3 - Does not meet conditions 1 or 2.

Anything with a red "X" should be dealt with.  Did the task start?  If so, then update the % complete.  If it did not start, then move the date to the anticipated start date.  If the task is in progress then the finish date may have been missed.  Has the task finished?  If so, mark the task 100% complete, if not, then move the finish date to the anticipated finish date.

Hope this helps!

Rick