The future of online project management

We often think of project management, portfolio governance, and project execution as doing a list of steps or tasks. The underlining work being done is really a process, which could be clunky or really smooth. Here’s my question: what happens when we do our work one way compared with when we do it the absolute best way?

Here’s my answer. I think the cost benefit of doing more things right increases logarithmically rather than linearly as we tend to execute our work better. The attached image show the results of my theory.

The vertical axis shows the level of cost savings. The horizontal axis displays the level of doing things from really bad to really great. As you can see the curve increases in a logarithmic fashion left to right. This means the better our process of getting things done, the faster we will save costs.

I’ll explain why. Let’s say we’re executing and managing a process like drilling an oil well. And let’s say there are 100 things that could go wrong. Doing it badly means we’ll probably hit close to 100 bad things. Doing it poor means we could run into a 90% chance of bad things happening. Either way we’re screwed in terms of saving costs and the gain between the two values is small.

Let’s look at the other end. Assume that drilling the well with good processes will leave us with a probability of 10% of things going wrong, which produces some cost-saving value. Now let’s say that we cut the probability of things going wrong down to near zero. The difference between those two states are quite high in terms of cost-savings potential. This is why I see a logarithmic curve instead of a linear line.

I don’t think many executives realize the logarithmic benefit of best practices. If so, then process improvement wouldn’t just be something a group does two floors down in the east wing. It would be something totally engrained in the enterprise culture and daily work. Do you know any organization at this level? There aren’t too many, but the few who understand this curve theory are already getting ahead of the market with enterprise-wide sharing.

This is one of the main reasons why I created PIEmatrix to be an enterprise online project management software with a focus on best-practice processes. I wanted to build a technology platform that makes it easier to implement a way to setup, execute, and maintain best-practices processes and run them as projects.

Let me know what you think?

What drives project success or failure? According to Standish Group, success and failure is driven from these top five factors:

1. Executive support
2. User involvement
3. Experienced project managers
4. Clear business objectives
5. Minimized scope

Why do most project management software focus on things like who has what task, when are they due, and what’s been done? What is project management? In my book, the top five factors above seem to be a good place to start. Notice none of the factors are related to “clear due dates” or “task assignment”. In fact, they don’t even cover collaboration. Don’t get me wrong, these project management tool features are important. I assume the organizations researched by the Standish Group already practice the basics such as task list scheduling and people assignments. They probably use project management tools from big vendors.

The problem with project management software is that they miss the opportunity to ensure success with the top factors. First of all, there’s little guarantee that the project management tool will contain the top five factors in a project’s task list. Secondly, even if they did contain this list, there’s no way to ensure they will be executed perfectly for success. For example, look at the Executive Support factor. It’s easy to have this as a task item, and it’s straight forward to get a nod from the sponsor and mark this task done. Even an official sign-off isn’t hard to obtain. The hard part is to draw out the expectations for Executive Support. Maybe the expectation contains the executive’s view point on the ultimate value of the project deliverables. Or maybe it’s an understanding of how and when the executive will be updated. Think about how to get this task done right. It should be done so correctly that the executives will guarantee they will do their part to ensure the project will be a success. This how-to example is what I call a best practice step.

The idea of best practices is about turning the top five Standish Group factors into a set of process steps on how to accomplish them the best ways for success. These types of processes need to be correct, clear, and simple enough for any project lead or team member to execute.

Imagine a project management software platform including best practice execution and governance as a core basic feature. I would be pushing it by calling this the “killer app”. But, would I? If a project management software had killer best practices with complete how-to steps, image the power of success. Now go down the line with the other top factors. Imagine a proven best practice for ensuring correct user involvement. Imagine junior project managers having the know-how at their finger tips. Image the process driving us to what it means to have clear business objectives. This is power!

Task list? Check.
Due dates? Check.
People assignment? Check.
Execute. Execute how?
Best practice? Check.
Execute. Got it.

As we drive down the road and look in the rear view mirror we see where we’ve been. Most of today’s project and portfolio management (PPM) tools do that really well. They show us what has happened. Ok, historical knowledge can have its purpose.

However, getting improved direction from history data can fail. PPM tools can show when something was late. But it’s difficult to identify the reasons. The main problem is that the data usually doesn’t contain the process, or best practice process. It’s too task focused. For example, let’s look at these three tasks:

1) Obtain requirements from finance

2) Review requirements with finance director

3) Approve requirements

Now, let’s say at step three we are two weeks late. If it’s on the critical path, the project is at risk. History can tell us that next time around we may want to assign an extra two week span as a buffer. That is all we can do without more knowledge. This is weak.

What if we expanded the three steps to include best practice content. The process could include the following:

1) Obtain requirements from finance. Identify key business subject matter experts and decision makers. Setup a meeting so the right people attend. Schedule a second meeting in advance, etc…

2) Review requirements with finance director. Understand director’s perception and critical needs. Review the teams recommendations, etc.

With the process information along with historical time data, we can better learn what really happened and readjust the best practice processes for future projects. For example, in step 2, the future process best practice could change “finance director” to “finance process owner and decision maker” with a description on how to confirm who this is. We found out that the finance director held no final say and it took another week to meet with the right person. The next time around, we may be on time without needing to add the buffer weeks.

Another failure with history as provided by most PPM tools is the lack of control over future actions. It’s not difficult to meet up at the end and talk about failures and what to do in the future. The hard part is turning the gained knowledge into action and accountability. This means a new process to execute govern for compliance.

This is where we need both process content along with technology that has process and best practice as the focus. This is unlike the other tools that make tasks as the main focus. PIEmatrix is an example platform that is designed from the bottom up to bring process methodology into the hands of every person on the project. If that process is really good process, then the risk of being late can be managed or eliminated. As we evolve the process to new best practices, then we have the power to drive the future.

Now as we drive down the road, looking in the rear view mirror is good for awareness. However, to get to where we want to go, we need to keep our eyes ahead and take the best route for safety and speed.

As I write this, Barack Obama is officially president, banks are begging for more bail-outs, and NPR news is still saying this recession may be as bad as the Great Depression.

Okay, now what?

I say let’s be proactive. This is a great time to focus on staying out of trouble, being more efficient, and going after new opportunities. Here are a few thoughts on how to leverage processes.

Stay out of trouble

Before we can focus on anything, the top priority is to stay out of trouble. That can mean anything from tying to find out who knows what to staying out of jail. For example, a very short-term issue many will experience is the after effects from layoffs. Knowledge has gone out the door. To stop any further loss, now is the time to get everyone to document their processes. (By the way, don’t reduce your audit staff before you capture regulation or compliance processes that could keep top executives out of jail.)

Be more efficient

Not only should we capture everyone’s knowledge, we should take advantage of this knowledge along with new thinking to become more efficient. This can mean doing more with less. When sales were booming, we were all too busy with market growth and throwing away money wasn’t such an issue. In this economy the phone is not ringing off the hook and we no longer have money to toss, so now is the time to look at efficiency focus projects. We first need to encapsulate current practices, track success, and then quickly evolve those steps into new best practices that generate efficiencies.

Go after new opportunities

New opportunities could be developing smarter marketing campaigns, new sales techniques, or even enhancing our process on business proposal submissions. Our competitors are most likely hunched down with their heads in the sand. They too are cutting back, laying off, and not advertising. Many are dropping new product development and other initiatives that would normally do harm to our own businesses. So, let them! What ever we do will be much easier to stand out in this economy. While everyone is crying, we can be scheming!

Again, think about establishing new processes systematically, because if it’s systematic, it can be easily executed, governed, and enhanced. Which processes will be based on top priorities? If we are losing sales in this economy, it’s not the sales team’s fault, it’s the process no longer working. This means we need to try new approaches and do so quickly. If our processes are defined, then changing them on a dime will be easier. We will also be able to justify the changes.

Our three-tiered approach is not only important to help us with the economy crisis, but it will also be critical when the economy starts to pick up. If our processes are systematic and executable, just think of the power we will all have coming out of the gate. When our competitors are just popping up their heads to look around we’ll be miles down the road capturing new growth and doing so with much less baggage!

The economy stinks and maybe your sales too. People get laid off and projects placed on hold. Okay, this reaction has some merit, however, I feel many organizations are missing new opportunities. For example, let’s say your budget for projects is cut in half. You still have the same new project demand. That doesn’t go away. You may have a process in place for selecting which projects to do first (for example, feeding the squeaky wheel). Look at how that process can be changed to deal with a lower budget. For example, all business cases would now need to show direct first year ROI above 140% to be moved to the consideration stage. Another example is you now need to implement projects with half the resources. This could mean the process for defining business requirements changes to focus more on identifying key requirements with either quick wins or short term ROI. All other requirements get trashed.

Let’s now look at the revenue side. Before you fire half of your sales team, think about changing their sales methodology to accommodate new objections. Or think about updating the marketing campaign processes that drive new approaches to business climate changes — and then drive better leads for your sales team.

What ever your priority, process is king. Process is the way you do things and a process standard is the way you do that over and over. Have you reviewed your process management approach? Is your process management technology making your life easier, such as the giving you the ability to swing on a dime as the market changes from week-to-week? Do you have the right processes and can your processes adapt that quickly? If not, you’re in double trouble!

Okay, let’s fast forward 12 months or so. The economy turns around, new sales orders are flowing in, but heck, you’re understaffed and all your processes are based on low sales. Guess what? You start to lose sales since you cannot fulfill the orders and keep customers happy. They go on to your competitors.

Again process in king. Think of your top three priorities. Mine are increase sales, cut cost, drive better efficiencies. All of these can easily be driven in PIEmatrix or other technology process platforms. (I not only use PIEmatrix for our development processes and HR, but also for driving the sales pipeline. That process has changed at least a dozen times over the past month. With my sales team’s input, I we are getting better.) If your process is tangible, easy-to-follow, quick to execute, and simple to govern, you’re halfway there. If your process is also easy to change today and deploy back out to the teams tomorrow morning, then you are really there!

Selling Spree Sends Dow Below 10,000 Mark. Turmoil In Europe. These were today’s headlines on NPR’s website. It’s a no brainer. Companies will be tightening down with cuts here and freezes there. Knee jerk reactions. Is that a good move? Maybe not. If the reaction is not thought through and implemented systematically, things could get worse in the longer run. I propose the strategy of getting new processes and procedures in place to ensure efficiencies. 

For example, let’s say your organization has many projects. Now executives say their budgets are being cut in half. A smart organization would not react without thinking. It will invest up front time in defining processes to drive the cost cutting initiatives. One such process is how to review and decide on whether a project should be cut. Treat this as a a crisis management project in itself that can be repeated over and over for each department for their projects and roadmaps. This crisis management project would have project phases, action steps, people roles, and final deliverables.

Another example is an enterprise initiative to implement efficiencies. Again, this could be setup as a process template with procedures that identify efficiency opportunities and execution correction steps. This template would then be replicated throughout the enterprise, driving efficiency best practices or hard procedures for cost cutting and efficiency gain results.

Investing in new processes require a systematic approach. You need processes, good people, and technology for implementation and governance.

Now bear with me. I’m going to put on my sales hat, but I’m doing so for a good reason. PIEmatrix can help as the technology facilitator.

As a process and procedure platform, PIEmatrix can be setup by small to large enterprises with their act-now-financial-crisis procedure steps as ready-to-use templates. They can execute these templates as projects. Assigned team members would use PIEmatrix to know what to do, collaborate with stakeholders, and keep track of execution progress. And upper management can then monitor the results in real-time.

Timing is critical, so get started now. Define proceses for finding and implementing efficiencies. Use PIEmatrix to get those processes executed. Govern the initiative. Update the process quickly. Be smart, systematic, and stay out of trouble. 

This past week PIEmatrix conducted a survey at the NorCal PMI Symposium 2008 hosted at Stanford University. The survey question was “What are your top three challenges in migrating to a more mature process organization?” There were close to 300 attendees (mostly project managers) and we received responses from the majority. Here is the list of the top five areas that need the most improvement. (The percentage reflects the occurrences).

1. Enhance executive and sponsor commitment – 16%
2. Improve project knowledge and implementation – 13%
3. Improve culture – 12%
4. Improve training and skills – 12%
5. Enhance people change management – 9%

It’s interesting to get a different survey results when comparing what project managers see as issues and what project management office directors see as issues. They don’t really align. (See the PMO survey blog). It’s clear that that many feel there is a lack in sponsor commitment. The second day of the conference, they setup table workshops that focused on these and other issues. The idea was to discuss the issues and come up with improvements. I was lucky to sit in on one table. The thoughts that came out of my group included adding a project process step to capture the sponsor’s expectations, personal commitement, reporting needs, etc. I captured these ideas and entered them into the PIEmatrix Community crowdsource platform as ready-to-use process steps. Any PIEmatrix beta customer can log in and contribute to these ideas and also import them into their own private PIEmatrix context from where they can implement them directly on projects. I hope to see customers work together and share more ideas with their peers in this manner. I saw this as a great value from a conference. Not only did people let out some steam, but also banded together and came up with some real solutions that can be applied!

I recently presented PIEmatrix at the CBP Summit 2008 in Scottsdale, AZ. The conference is one of the top PMO (Project Management Office) events in the US. Most attendees where PMO directors from large enterprises. We had the opportunity to conduct a conference survey for all the attendees. The survey asked “what are the top 3 best practice needs for project implementation that you would like to discuss with your peers?”. We received about a 90% response rate. The result displayed 34 different process standard needs. The following are the top five:

1. Resource Management – 17%
2. Risk Management – 8%
3. Portfolio Management – 8%
4. Project Management – 6%
5. Financial Management – 6%

This is an interesting statement showing where the pain is in the project industry from the PMO perspective. I would assume that resource management is also the top challenge project managers face since their issues funnel up to the PMO and upper management. This was not unexpected since many of our beta customers have asked PIEmatrix for more resource management features. However, it’s great to be able to show real metrics from the market.

Further in the conference we learned that within resource management, the challenges include utilization management, motivation, skills mapping, etc. One breakout workshop came up with some shared best practice needs and example solutions. At the conference we captured this data in our new PIEmatrix crowdsource-community platform. This opens up the ability for the PMO directors to go back to their offices and continue to discuss and share best practices with their peers. This is still a work in progress, but the need in the market to collaborate on resource management pains is very clear.

Do you need to build best practices for your projects? Maybe you can spit it out in one sitting. Maybe not. I recently wrote about using crowdsourcing to help build best practices for projects. The concept is working with your peers from different organizations, across industries. The power of leveraging others’ experiences is a win. Today, I want to focus on outsourcing to your own internal team. They deal with your process every day, so why not leverage their expertise?

One approach is to get the group together for a story-boarding session. Post-Its on a wall works. Or you could use PIEmatrix to help story-board. Focus on high level process steps first and keep it simple. Ask them to kick start by listing the deliverables. This is the easy part and you may already have this documented. Next is to list all possible failure points (future fires). Most everyone is a critic. So, leverage this. It may not take long to list experience with risk in each project stage. Now, turn the table and ask them to come up with high-level process steps to reduce the risks. This is harder, but at least they have a good starting point. At the end of the session, ask for volunteers to take certain process points to decompose into more detail. You will find the details goes to those who have the depth.

The other option is for you or your firm’s process expert to define the high-level process steps and then outsource the detailed definitions to the front-line team members based on their expertise.

Once you have your new best practice process defined (documented or placed in PIEmatrix) the challenge is to get it to stick. However, you have an advantage. The team who needs to do the sticking has personal stake. They are more likely to better adopt to process change if they helped build it. Over the longer term, keep the best practices fresh with process evoluton workshops.

My last post introduced the “pie”. Today, I’ll explain how we turn a pie on its side to represent a matrix. To recap, many iterative project methodology models are circular. For example, in my last post, I chose slices (or project stages) Plan, Discover, Design, Construct, etc. Now, let’s take this two-dimensional pie and flip it on its side to show its edge. The side view is what I call the pie’s layer. Let’s say this layer is called Project Management. Under the first slice called Plan is a cell that aligns with Project Management. If you were to look in this cell, you may find process steps such as identify business needs, define budget, etc. Basically, the layers and their cell content can contain process methodology, best practices, or procedures steps.

As we all know, project management is only one factor in project processes. There can be others such as risk management, project implementation, or steps for a regulation. The idea of looking at the pie from its three-dimensional layer view is you can start to stack up more process layers, such as adding toppings to a cheese pizza. This is where the matrix becomes clear. The slices are columns and the layers are rows. What is interesting about this model is it forces each process methodology or best practice to align with each other.

Many companies are struggling with different process methodologies on large projects, each method having its own structure and nomenclature. Let’s say if an IT team is using the PMI standard for project management and the RUP method for the systems development life cycle. Now throw in an audit committee with their own process for Sarbanes-Oxley requirements. You end up with groups of people on the same project speaking different languages.

What if we formulated a pie-matrix structure that forces all team members to agree on the naming of the project stages (pie slices). Then add each process methodology as a layer. The simpleness is you now have stage alignment between standards. This is the basic model I created for the PIEmatrix platform and this was only the starting point. PIEmatrix is an open web platform and is process content agnostic, meaning its up to our users to enter any best practice content they choose. We expanded the platform to allow further integration of different standards with pointers across standards boundaries. We added project task management features for the front line team members, dashboards for governance, and an SaaS model where people can collaborate together from anywhere around the world, all speaking the same process language and working together on the same page.