Corporate Performance Management: Process Improvement

We know these two concepts relate to one another, but how? 

First, some definitions...

Business process improvement (BPI) is defined as a systematic approach that helps organizations optimize its underlying processes in an effort to achieve better results.   BPI works by:

• Defining the organization's strategic goals and purposes (Who are we, what do we do, and why do we do it?)
• Determining the organization's customers (or stakeholders) (Who do we serve?)
• Aligning the business processes to realize the organization's goals (How do we do it better?)

Corporate performance management (CPM) is defined as the monitoring and analysis of a company’s performance goals.  CPM works by:

• Defining the goals of a company or business unit (strategic planning)
• Gathering the relevant data to measure those goals (benchmarking)
• Consolidating and reporting on that data (financial reporting)
• Comparing and contrasting the actual performance vs. performance goals (the budgeting process)
• Making operational and strategic decisions in light of that information (The Balanced Scorecard)

So if the goal of CPM is to analyze and monitor a company's results, and the goal of BPI is to improve processes to achieve better results, then clearly these two concepts go hand-in-hand.  In fact, they share a lot of common characteristics: 

• An organization's strategic goals should provide the key direction for any Business Process Improvement exercise. This alignment can be brought about by integrating programs like Balanced Scorecard to the BPI initiative
• BPI tools place a lot of emphasis on "measurable results". Accordingly, benchmarks assume an important role in any BPI initiative. Benchmarks may be internal (within the organization), external (from other competing / noncompeting organizations) or dictated by the senior management of the organization

A BPI initiative could come about after a company has implemented its CPM solution and realized that they are not meeting one or more of their strategic goals.  Let's say that the organization realizes it needs to reduce expenses by 5% in order to achieve its profit margin goal.  One way to reduce expenses is to optimize its business process such that redundancies and inefficiencies are removed.  This is where a business process improvement initiative comes into play. 

• The first step in BPI is to define the existing structure and process at play (AS-IS). 
• Then, the organization must determine what outcomes would add value to the organization's objectives and how best to align its processes to achieve those outcomes (TO-BE). 
• Then a full scale BPI project is initiated to achieve those outcomes

The Business Analyst Role in the Agile World

Facilitating risk discovery and assisting the team in retaining focus on effective risk mitigation is central to the analyst’s role on an agile team.  Iterative development processes provide opportunities for increased efficiencies in the work of business analysis. In non-agile projects (i.e. waterfall projects), requirements are developed in their entirety prior to the development phase. As risk elements are uncovered and business needs evolve, certain requirements may change or be eliminated outright; making the work effort put into those requirements wasted. By providing just-in-time requirements via agile development, there is less rework of requirements because only the requirements required for the current release are defined in detail and developed.

The techniques of business analysis do not change dramatically in the agile environment. However, the timing and how they are used do change. Artifacts such as personas, data models, story maps, and business rules continue to be employed, but are kept as lightweight as possible. Low-fidelity artifacts, such as diagrams, maps, and lists, provide more value to an agile project than long, textual requirement descriptions or specifications. Low-fidelity artifacts are developed for the sole purpose of building the software for a specific iteration and only need to be intelligible to the team during the course of the iteration. Long-lived artifacts, on the other hand, are intended to be utilized beyond the scope of development. Long-lived artifacts may include the business case, charter, and documentation that is used to communicate what the software does and why it does it.

Agile offers the opportunity for the business analysis to benefit from the frequent feedback provided by the business. By reviewing the results of successive iterations with the business stakeholders, analysts have the opportunity to

• refine the product’s requirements to ensure they maintain cohesion with the business needs for the product
• identify and mitigate risk early in the project

 

There are a variety of ways a business analyst can be engaged on an Agile project:

• In more complex environments the analyst might be the facilitator, bringing divergent business stakeholders together and helping them speak with a single voice so the project team are not confused by contradictory and conflicting perspectives.
• The analyst might act as the product owner/customer representative where they are empowered by the business to make decisions on product features and priority.
• The analyst could act as a surrogate product owner, in situations where the business product owner not available.
• The analyst might act as the second in command to a business product owner with limited availability.
• An analyst could take the role of business coach in an environment where the business product owner is competent and committed, but has limited IT project experience and the rest of the development team are lacking in domain knowledge.

Irrespective of job titles, business analysis is about ensuring the project is able to deliver the maximum value for customers and adapting to the evolving business needs.

The 5 Reasons Why Projects Fail

Do your projects suffer from these undesirable effects?

• delivery date is well past due date
• your resources are overloaded
• your resources are not available when needed (even when promised)
• your scope suffers from excessive changes (due to long project timelines)
• there are changing priorities & constant rework

There are five main reasons why your projects struggle with these problems:

1. Bad multi-tasking - do you or your team constantly face shifting priorities that cause reources to stop one task and work on another? Is someone waiting for the output of your task before they can do their work? This is the definition of bad multitasking.  Often the culprit is poor prioritization. We are asked to start several tasks simultaneously and each of them has a "customer" waiting for the output. Each customer wants progress to be made on their task and constantly asks - "is it done yet?" - forcing us to repeatedly switch to their task to get something done and report progress. While working on this task other customers request status on their respective tasks. This cycle forces us to task switch repeatedly.
2. Student syndrome - this is also known as procrastination.  Student syndrome is a natural defense mechanism. It means to put off the work until the last possible moment not because we are lazy, in fact we are working very hard, but because urgent tasks will take precedence over important tasks.  Due to competing demands we delay the start of tasks until we absolutely must start.
3. Parkinson's law - this is defined as "work expands so as to fill the time available for its completion." In a project sense, Parkinson's law rears it's ugly head when team members embed greater safety in task estimates because they feel like their estimates will not be "estimates", but rather committments.  In order to make sure they deliver on their "committments", team members add in slack to allow for the uncertainty.
4. Task dependency - if you have a task that was estimated to take 5 days and you started immediately, and completed the task “early,” is the person that receives your output ready to use it immediately? Not usually. Therefore, if you deliver the results in 3 days the next person will not touch it for 2 additional days because they are not scheduled to start their task until that time. To overcome this problem you must have a project system that ensures all tasks begin, not when they are scheduled to begin, but when the required inputs are available.
5. PM math where 2+2=5 - each of the above scenarios contribute to the final reasons why projets struggle..."project math". 

Each of these problems not only drain the company of valuable resources, it also causes a delay in the potential cash flow that results from a finished project.  Remember, if you keep doing what you have always done you will keep getting what you've always got -- late projects. 

To remove these obstacles you will need to stop bad multitasking, develop a system that allows early and late tasks to cancel each other out, account for the probability of dependent events, stop the effects of Parkinson's Law, ensure that when one task completes the results appear almost instantaneously to the next task in line, and stop the practice of adding safety to each task.

Interviewing

Project managers and business analysts can spend hours running through SWOT and decision analysis, reviewing system documentation, analyzing various use cases and scenarios, and setting up focus groups and survey questionaires, but ultimately all these techniques may not yield the types of information gleaned from simply interviewing project stakeholders.

An interview is a systematic approach designed to elicit information from a person or group of people in an informal or formal setting by talking to an interviewee, asking relevant questions and documenting the responses.

For the purpose of eliciting requirements, interviews are of two basic types:

• Structured Interview - where the interviewer has a pre-defined set of questions and is looking for answers
• Unstructured Interview - where, without any pre-defined questions, the interviewer and the interviewee discuss topics of interest in an open-ended way

Successful interviewing depends on several factors including, but not limited to:

• Level of understanding of the domain by the interviewer
• Experience of the interviewer in conducting interviews
• Skill of the interviewer in documenting the discussions
• Readiness of interviewee to provide the relevant information
• Degree of clarity in interviewee’s mind about what the business requires of the target system
• Rapport of the interviewer with the interviewee
• Rapport of the interviewer with the interviewee

In relation to other solicitation techniques, the advantages and disadvantages in using interviews are:

1) Advantages:

• Encourages participation and establishes rapport with the stakeholder
• Simple, direct technique that can be used in varying situations
• Allows the interviewer and participant to have full discussions and explanations of the questions and answers.
• Enables observations of non-verbal behavior
• The interviewer can ask follow-up and probing questions to confirm their own understanding
• Allows interviewees to express opinions in private that they may be reluctant to express in public

2) Disadvantages:

• Interviews are not an ideal means of reaching consensus across a group of stakeholders
• Requires considerable commitment and involvement of the participants
• Training is required to conduct effective interviews. In particular, unstructured interviews require special skills including facilitation/virtual facilitation and active listening
• Depth of follow-on questions may be dependent on the interviewer’s knowledge of the business domain
• Transcription and analysis of interview data can be complex and expensive
• Based on the level of clarity provided during the interview, the resulting documentation may be subject to interviewer’s interpretation
• There is a risk of unintentionally leading the interviewee

Decision Analysis

Decision analysis is an approach to decision-making that examines and models the possible consequences of different decisions. Decision analysis assists in making an optimal decision under conditions of uncertainty.

Effective decision analysis requires that the business analyst/project manager understand:

• The values, goals and objectives that are relevant to the decision problem
• The nature of the decision that must be made
• The areas of uncertainty that affect the decision
• And the consequences of each possible decision

Uncertainty may exist because of:

• Unknown factors that are relevant to the decision problem
• There are too many possible interrelated factors to consider
• Conflicting perspectives on a situation
• Tradeoffs between the different available options

A common method of dealing with uncertainty in decision problems is to calculate the expected value of outcomes. This involves estimating the percentage chance of each outcome occurring and them multiplying the numeric value associated with that outcome by that percentage.

Decision analysis generally requires that the business analyst/project manager to use some form of mathematical model to assess possible financial outcomes.  Commonly used financial valuation techniques include:

• Discounted Cash Flow: future value on a specific data
• Net Present Value: future view of costs and benefits converted to today’s value
• Internal Rate of Return: the interest rate (or discount) when the net present value is equal to zero
• Average Rate of Return: estimate of rate of return on an investment
• Pay Back Period: the amount of time it takes for an investment to pay for itself 
• Cost-Benefit Analysis: quantification of costs and benefits for a proposed new solution

Not all decision outcomes can be expressed in financial terms. However, effective decision analysis still requires that outcomes be directly comparable. In some cases, there will be a metric that is applicable (defects per thousand, percentage uptime, customer satisfaction rating). When there is not, a relative scoring of possible outcomes will have to be determined.

Document & Business Rule Analysis

Document analysis is a means to elicit requirements by studying available documentation on existing and comparable solutions and identifying relevant information.  Business Rule Analysis analyzes the rules that govern decisions in an organization and that define, constrain, or enable organizational operations.  Both of these analysis techniques help the project manager and business analyst identify the needs of the client, as well as the requirements and expectations for the project implementation. 

Document analysis is used if the objective is to gather details of existing solutions, including business rules, entities, and attributes that need to be included in a new solution or need to be updated for the current solution. This technique also applies in situations where the subject matter experts for the existing solutions are no longer with the organization, or are not going to be available throughout the duration of the elicitation process.

Business rules analysis is a subset of document analysis and can be development in two distinct forms:

1. Operative rules are rules that the organization chooses to enforce as a matter of policy. They are intended to guide the actions of people working within the organization.  An example...An order must not be placed when the billing address provided by the customer does not match the address on file with the credit card provider.
2. Structural rules are intended to help determine when something is or is not true, or when things fall into a specific category. They are expressed as rules because they describe categorizations that may change over time.  An example...An order must have one and only one associated payment method.

The impact of changes to business rules resulting from projects can be assessed more easily when they are documented separately from the processes they detail or the means used to enforce the rules.  It is also important to question existing business rules for continuing relevance to current and projected modes of organizational operations and structure after a project implementation.  The same can be said for all other supporting system documentation. 

Project Management: Schedule Management

Organizing the various components of a project -- the activities, the resources, and the logical relationships between each -- into an effective schedule is a discipline that all project managers must develop and nurture.

Scheduling provides a detailed plan that represents how and when the project should deliver the products, services, and results defined in the project charter and project scope.  Since projects are complex endeavors, a detailed schedule results in decomposing the project into manageable phases or groupings.  Project performance can then be reported and monitored when progress is measured against these activities. 
More specifically, the schedule supports the project by allowing for:

• Time phasing of required activities
• Mobilization of resources in the most efficient manner
• Coordination of events within the project
• Early detection of risks and problems
• Resource planning
• Forecasting of time and cost estimate at complete

A schedule method provides a framework for the creation of a project schedule.

1. Critical Path Method (CPM) - determines the minimum total project duration and the earliest possible finish date, as well as the amount of flexibility in the schedule 
2. Precedence Diagramming Method (PDM) - also known as a project network diagram, PDM is a cleaner, easier to follow, graphical representation of a project's process flow 
3. Critical Chain Method - developed from the CPM approach, it considers the effects of resource alloction, resource leveling and activity duration uncertainty on the critical path

Once a particular method is chosen, a number of estimation techniques can be applied to that method to derive the project schedule

• Rolling Wave - provides a detailed decomposition of project activities for the near term, focusing on activities to be accomplished over a 60-day or 90-day timeframe
• Agile - similar in nature to rolling wave estimation, agile estimation focuses on sprint development cycles, which typically last 2-4 weeks
• PERT - uses a comnination of optimistic, pessimistic and most-likely duration estimates in determining the length of schedule tasks
• Monte Carlo Simulation - an algorithmic approach to estimation that relies, which relies on repeated iterations, each of which represent a possible project result

Over the course of my posts here, I will delve deeper into schedule management, with further discussion on schedule models, schedule methods & schedule techinques.

Corporate Performance Management: Predictive Analytics

Research shows that analytics-based decision-making can contribute significantly to the achievement of a company's strategic objectives.

Analytics is defined as the application of technology, research and statistics to solve problems, and realize opportunities, in business and industry.  It's intent is to optimize a company's performance by developing decision recommendations based on insights derived through the analysis of existing and/or simulated future data. Business managers may choose to make decisions based on past experiences or rules of thumb, or there might be other qualitative aspects to decision making; but as soon as those managers evaluate & analyze data when making decisions, they are employing analytics. Common applications of analytics include the study of business data in order to discover and understand historical patterns with an eye to predicting and improving business performance in the future

Predictive analytics can be used as a way to enhance corporate performance management because it improves the quality of decision making, as well as the speed of execution of those decisions. 

Performance management has 3 components.  At it's most basic level, performance management includes reporting on historical performance. The next level is the alignment of company strategy, resources and finances towards achieving a stated objective (i.e. the balanced scorecard).  The final step, and the one many companies forget about, is to continually improve performance by having accurate answers to questions such as:

• Which measures drive the business, and which do not?
• Why did a problem occur?
• Is there an opportunity we can take advantage of?
• Are we acting or reacting?

Once a corporate performance management solution is in place -- with KPI's that have been linked to a company's strategic objectives -- it allows companies to come together across multiple functions to look at their situation, to understand what’s happening in their business & explore why it is happening.  Predictive analytics takes the next step by applying scenario analysis to the information, helping a company predict what will happen if these trends continue.  This will allow them to determine best case scenarios that will help them achieve their strategic objectives.  Decision makers will have access to data they need, when they need it, wherever they need it, in whatever form.  It will help deliver better overall decision making capabilities in terms of sustainable shareholder value.

Predictive analytics are important because organizations are shifting away from managing by control and reacting to after-the-fact data; they’re moving toward managing with anticipatory planning. The goal is to be proactive and make adjustments before problems occur. 

Corporate Performance Management: Cut through the confusion

There’s still some confusion in the marketplace about the meaning of the term “performance management." The confusion begins with the alphabet soup of acronyms. We often see in the press and media the acronyms BPM for business performance management, CPM for corporate performance management, and EPM for enterprise performance management. Fortunately, the industry is beginning to accept the short version, and simply calling it PM — performance management.

Performance management should not be confused with the more mechanical business process management tools that automate the tasks of creating, revising, and managing workflow processes, such as customer order entry and accounts receivable.  A similar confusion arises from the term being narrowly applied to a single function or department, as in marketing performance management or IT performance management. Then there’s the historical baggage that the term carries. In the past, performance management most commonly referred to the job performance of individual employees and the methods used by the personnel and human resources functions for processes such as employee appraisals. But today, the term is widely accepted as covering enterprisewide performance — the performance of an organization as a whole. Clearly, employees’ performance is an important element in an organization’s success, but in the broad framework of performance management, human capital management is just one component.

Performance management should be thought of as a way to manage the actual performance of the firms strategic objectives.  Think of it as an umbrella concept that integrates operational and financial information into a single decision-support and planning framework. Its capabilities include strategy mapping, a strategic balanced scorecard, operational dashboards, costing (including activity-based cost management), budgeting, forecasting, and resource capacity requirements planning.

Performance management gets its power by intergrating all the managerial methodologies, such as CRM (customer relationship management), SCM (supply chain management), business process management, human capital managemnt, as well as Six Sigma and other quality initiatives, into one integrated & unified view of the business.  Unfortunately, most organizations performance management’s methodologies are typically implemented in a silo-like sequence and operate in isolation from each other. It’s as if the project teams and managers responsible for each methodology live in parallel universes. But we all know that there are linkages and inter-dependencies, so we know that they should all somehow be integrated. It’s like a jigsaw puzzle — everyone knows that the pieces should fit together. Performance management provides that missing picture of integration, both technologically and socially. It makes executing the strategy everyone’s Number 1 job. 

In the end, organizations need top-down guidance with bottom-up execution. The way to get there is through integrating methodologies and applying analytics to complete the full vision of the performance management framework.

Focus Groups & Survey's

A focus group is a means to elicit ideas and attitudes about a specific product, service or opportunity in an interactive group environment. The participants share their impressions, preferences and needs, guided by a moderator.

 

Focus groups provide an opportunity for individuals to share their own perspectives and discuss them in a group setting. This could lead participants to re-evaluate their own perspectives in light of others’ experiences.

A focus group typically consists of 6-12 attendees , and the topic of the focus group will influence who should be recruited to the meeting.  A trained moderator is required to manage the administrative pre-work, facilitate the session and produce a report on the findings of the focus group session.

 

These can be utilized during any life-cycle state: exploratory, under development, ready to launch, or in production. If the group’s topic is a product under development, the group’s ideas are analyzed in relationship to the stated requirements. This may result in updating existing requirements or uncovering new requirements. If the topic is a completed product that is ready to be launched, the group’s report could influence how to position the product in the market. If the topic is a product in production, the group’s report may provide direction on the revisions to the next release of requirements.

 

Advantages of focus groups:

• Ability to elicit data from a group of people in a single session saves time and cost as compared to conducting individual interviews with the same number of people
• Effective for learning people’s attitudes, experiences and desires
• Active discussion creates an environment where participants can consider their personal view in relation to other perspectives

Disadvantages of focus groups:

• In the group setting, participants may be concerned about issues of trust, or may be unwilling to discuss sensitive or personal topics
• Data collected (what people say) may not be consistent with how people actually behave
• It may be difficult to schedule the group for the same date and time
• If the goal of the focus group is to elicit ideas on a new or changing product, a focus group is not an effective way to evaluate usability

 

 

Certified Business Analysis Professional - CBAP ©

If you are interested in becoming certified in the field of business analysis, please take some time to read through the information below (which was taken from the Internation Institute of Business Analysis website)...

The Certified Business Analysis ProfessionalTM (CBAP®) designation is a professional certification for individuals with extensive business analysis experience. With at least 7500 hours of hands-on BA experience, CBAP® recipients are the elite, senior members of the BA community.

CBAP® recipients are experts in identifying the business needs of an organization in order to determine the best solutions. More and more companies are recognizing the CBAP® designation and the value and expertise that these professionals bring to their organizations.

You will want to consider the many professional benefits of earning the CBAP® designation if you have an advanced level of knowledge and experience and are working in any of the following roles:

• Business Analysis
• Systems Analysis
• Requirements Management and Analysis
• Process Improvement
• Consulting

To earn the CBAP^® designation, applicants must meet the following criteria:

• Minimum 7500 hours of BA work experience aligned with the BABOK^® Guide in the last 10 years
• Minimum 900 hours in four of the six knowledge areas
• Minimum 21 hours of Professional Development in the past four years
• Two references from a career manager, client or CBAP^® recipient
• Signed Code of Conduct

Applicants are expected to review the CBAP^® handbook for complete information on the application criteria, fees and details on how to apply.

Project Management Professional - PMP ©

If you are interested in becoming certified in the field of project management, please take some time to read through the information below (which was taken from the Project Management Institutes website)...

PMI’s Project Management Professional (PMP)^® credential is the most important industry-recognized certification for project managers. Globally recognized and demanded, the PMP^® demonstrates that you have the experience, education and competency to successfully lead and direct projects.  According to the PMI Salary Survey — Sixth Edition, a PMP increases your salary up to 10% more than your non-credentialed colleagues and peers.

 

Who should apply?

The PMP recognizes demonstrated competence in leading and directing project teams. If you’re an experienced project manager looking to solidify your skills, stand out to employers and maximize your earning potential, the PMP credential is the right choice for you.

 

PMP Requirements

To apply for the PMP, you need to have either:

• A four-year degree (bachelor’s or the global equivalent) and at least three years of project management experience, with 4,500 hours leading and directing projects and 35 hours of project management education.
  
  OR
• A secondary diploma (high school or the global equivalent) with at least five years of project management experience, with 7,500 hours leading and directing projects and 35 hours of project management education.

If you do not meet the PMP eligibility requirements, you may want to look at the Certified Associate in Project Management (CAPM)^® certification.

How to Apply

• To apply for the PMP, register and log in to our online system to get started. A printable PMP application form is also available.
• Need more information? Get more information on the PMP’s role and requirements. For a more detailed look, consult the PMP Handbook.
• If you’re ready to take the exam, the PMP exam preparation can get you started.

 

Maintain Your PMP

As part of PMI’s Continuing Certification Requirements program, a PMP credential holder will need to earn 60 PDUs per three-year cycle. To learn more about the program, what are PDUs, how to earn and claim them, as well as step-by-step instructions on how to renew your certification, watch the CCR video.

Project Management: Project Governance

The ubiquitous nature of PMO's, and the development of program and portfolio management across enterprises, offer evidence for the need of a systematic and repeatable framework for managing projects & delivering upon strategic objectives. The role of project governance is further evidence in providing a decision making framework that is logical, robust and repeatable to govern an organization’s capital investments.

Project governance provides a comprehensive, consistent method of controlling a project and ensuring its success. It is a management framework within which major project decisions are made. This decision making framework is supported by 3 pillars:

1. Structure - this refers to the governance committee structure. Most projects include the use of a Project Board, or Project Steering Committee, composed of various stakeholders and stakeholder groups who provide guidance, direction and control to a project within an organization. The functions of the committee might including building a business case for the project, planning, providing assistance and guidance, monitoring the progress, controlling the project scope and resolving conflicts.
2. People - the effectiveness of the committee structure is dependent upon the people that populate the various governance committees. Committee membership is determined by the nature of the project.
3. Information - this concerns the information that informs decision makers and consists of regular reports on the project, issues and risks that have been escalated by the Project Manager and certain key documents that describe the project, foremost of which is the business case.

Project governance frameworks should be based around a number of core principles in order to ensure their effectiveness:

• Principle 1: Ensure a single point of accountability for the success of the project
• Principle 2: Project ownership independent of those who have sponsored the project, allowing for a more objective approach to evaluating scope and project requirements
• Principle 3: Ensure separation of stakeholder management and project decision making activities
• Principle 4: Ensure separation of project governance and organisational governance structures

Proper project governance will:

• Outline the relationships between all internal and external groups involved in the project
• Describe the proper flow of information regarding the project
• Ensure the appropriate review of issues encountered within each project
• Ensure that required approvals and direction for the project is obtained at each appropriate stage of the project

The Project Management Office

For years, IT departments have struggled to deliver projects on time and within budget.  Technology is not always the most critical factor.  Inadequate project management implementation constitutes a third of project failures, while a lack of communication and an unfamiliarity with scope & complexity constitutes another 40%.  Accordingly, 70% of project failures are due to lack and/or improper implementation of project management methodologies.  As the discipline of project management has become more recognized as a unique and valuable skill set in industry, and as companies seek more efficiency and tighter monitoring of IT projects, most companies end up opening project management offices (PMO). 

A project management office (PMO) is an organizational body or entity assigned various responsibilities related to the centralized and coordinated management of the projects under its domain.  The responsibilities of a PMO can range from providing project management support functions to actually being responsible for the direct management of a project.

The projects supported or administered by the PMO may or may not be related, and the specific form, function and structure of the PMO is dependent upon the needs of the organization.  A PMO may be delegated to act as an integral stakeholder and key decision maker during the beginning of each project, to make recommendations, and to terminate projects or take other actions required to keep business objectives consistent. 

A primary function of a PMO is to support project managers in a variety of ways, which may include:

• Managing shared resources across all projects administered by the PMO
• Identifying and developing project management methodologies and best practices
• Coaching, mentoring and training of project management resources
• Monitoring compliance with project management standards, policies and procedures
• Developing and managing project policies, procedures and other shared organizational process assets
• Coordinating communication across projects

All these efforts are aligned with the strategic needs of the organization. Coming up with a PMO that works for any given organization is an exercise in both customization and patience. When it comes to establishing a PMO, there are no road maps to follow, benchmarks to shoot for or metrics against which to measure. The most effective PMOs are those that reap improvements over time and continuously push the IT department to improve on its performance

SWOT Analysis

Another important tool in the Business Analysts arsenal, used to quickly analyze various aspects of the business process or system undergoing change, is the SWOT Analysis. 

• Strength
• Weakness
• Opportunities
• Threats

Since a large part of my work has been in the corporate performance management arena, the SWOT Analysis is something I've used often as a framework for strategic planning, opportunity analysis, competitive analysis and business development. 

The steps to conduct a SWOT analysis are as follows:

• Draw a grid or matrix
• At the top of the grid/matrix, describe the topic or problem under discussion
• Conduct a brainstorming session to complete each section of the grid
• Strengths: any internal factor that the assessed group does well.  It may include anything such as effective processes, experienced personnel, low prices and customer relationships
• Weaknesses: any internal factor that the assessed group does poorly (or not at all)
• Opportunities: external factors that assessed group may be able to take advantage of, including new markets, new technology etc...
• Threats: external factors that can negatively affect the assessed group, including entrance into a market of a new competitor, economic downturns etc...
• Facilitate a discussion and analyze the results
• Brainstorm potential solutions to solve the problem (compare strengths & weaknesses against opportunities & threats)

Data Flow Diagrams & Data Models

In the engineering, technology and system development world, a model is anything used in any way to represent something. Some models are physical objects.  For instance, a toy model which may be assembled, and may even be made to work like the object it represents. Other models are conceptual models, and are used to represent concepts and/or processes which are part of a system. Each of these types of model is used to help us know and understand the subject matter we are trying to represent.

There are a number of visual and descriptive techniques used by software engineers and business analysts to model the “as is” and “to be” nature of the system they are analyzing. An earlier post of mine discussed two such models: scenarios and use cases.  In this post I'd like to discusses two other popular modeling technique: data flow diagrams & data modeling.

Data Flow Diagrams provide visual representations of how information moves through a system.  They are used as part of an overall structured analysis approach for converting business requirements into design specifications, and are typically used as a prerequisite activity to data modeling.  Data flow diagrams give the business analyst and software programmers a better understanding of the actors and processes involved in a system by showing:

• The external entities that provide data to, or receive data from, a system
• The processes of a system that transform the data
• The data stores in which data is collected
• The data flows by which data moves between each of the 3 items above

A data model is used to describe the concepts relevant to a domain, the relationships between those concepts and the information associated with them.  It usually takes the form of a diagram supported by textual descriptions, used to visually represent the types of people, places and things that are important to the system.  While the data flow diagram describes how the data & information flows within a system, the data model is used to better describe the actual data within that system.  Logical data models describe the information relevant to the organization, while physical data models descirbe how data is stored and managed in a software application (i.e. the data store). 

Below is the visual representation of a simple data model that could be used to store demographic information about people living in a city:

Corporate Performance Management vs. Business Intelligence

Based on a recent survey by the Gartner Group, Business Intelligence (BI) analytics and Corporate Performance Management (CPM) have been a top prioriy for Chief Information and Chief Financial officers for over 4 years.  Analyzing and enhancing corporate performance is important because it can help organizations find bottlenecks & inefficienes and help exploit areas that are profitable.

As I've discussed before, Corporate Performance Management is the process of managing an organizations strategy, and describes the methodologies, metrics, processes and systems used to monitor and manage a company's business performance.  Business Intelligence is an analytical process that produces insights, suggestions and recommendations for the managerial decision makers.

While both terms are used synonymously, they are different.  As a concept, CPM represents the strategic deployment of Business Intelligence solutions.  BI provides the backbone for CPM. BI is an enterprise information platform for querying, reporting and analyzing performance. It involes grabbing raw data from disparate source systems and integrating it into a data warehouse.  CPM is about leveraging that information in a meaningful way, in an effort to drive & measure corporate performance and decision making.

Strategy
BI: Offers the tools necessary to improve decision making, but not necessary linked to organizational strategy
CPM: linked to strategy through KPI's

Purpose
BI: Helps the organization gather relevant data (bottom up approach)
CPM: Helps the organization compare data to organizational goals (top down approach)

Scope
BI: One more departments or functional areas
CPM: Enterprise wide

Orientation of application
BI: reactive (analyzing past performance)
CPM: proactive (planning for future)

Project Management: Configuration Management

Configuration management focuses on establishing and maintaining the consistency of a system or product's performance with its requirements, design and operational information.  By identifying the functional and physical attributes of the system or product at various points in time -- and by regularly updating those attributes using a defined change control process -- a system or product's integrity and traceability are maintained and controled throughout the development life cycle.  Project configuration management (PCM) is the collective body of processes, activities, tools and methodologies used to manage these items during the project life cycle, and this management system helps to insure that the post-project functionality is documented. 

Throughout the life of a project, information is needed to help direct and manage the project.  Creating, modifying and storing these items is an important part of the project.  The following items are typically under the control of the PCM process:

• Project Artifacts - project documents, such as the project charter, statement of work, project management plan, WBS, project schedule etc..., are all project artifacts that need to be stored for reference purposes (both during and after a project)
• Structure - since these project artifacts are important collections of project related information, a method of structuring these documents is needed.  Information must be organized in an efficient way, allowing for the easy retrieval, storage and use of the information
• Item Identification - items selected are typically at a level of significance to present the project manager or sponsor with recognizable points of achievements
• Taxonomy Scheme - unique identification and naming conventions must be applied to all project artifacts such that all configuration management items can be tracked and cataloged

Applying configuration management principles to project artifacts ensures:

• The correct version of the item is in use by the project team
• Changes to items are only made by authorized individuals
• A planned means of notifying stakeholders of approved changes is in place
• A record is kept to support auditing and project closure activities

Project Management: Estimation

Project estimating - the act of creating a quantitative assessment of the likely amount or outcome of a project activity, cost and effort.

Effective project estimating is a key contributor to the successful planning and delivery of proejct objectives.  A project uses the cost, resource and duration estimates along with the expected benefits to build the business case for the project.  The initial estimates are used to baseline the project against the ongoing actual cost, resource and duration estimates.  Accuracy is the key here.  Project sponsors need to be able to trust that their project managers can deliver accurate and objective estimates for their projects.  This is achieved using widely recognized and consistenly applied estimation standards. 

There are several common characteristics of a good estimates.  They are:

• Clear identification of task - the estimator need to be provided with the description, ground rules, assumptions and technical/performance characteristics of each task
• Broad participation in preparing estimates - all stakeholders should be involved, and data should be independently verified for accuracy and reliability
• Availability of valid data - numerous sources of suitable and relevant data should be used when coming up with the estimates
• Standardized structure for the estimate - a standard work breakdown structure should be used, which will result in easier comparisons to similar projects
• Provisions for uncertainties - uncertainties need to be identified and contingencies need to be incorporated in the estimate in order to cover the effect of the known and unknown
• Independent review of estimates - this is critical in establishing confidence in the estimate
• Revision of estimates for significant changes - large changes that affect costs can significantly influence project decisions & therefore re-estimation should take place when large scale changes in the project occur

There are a number of methods in which a project manager may go about providing estimates:

• Analogous estimation - a top down estimation technique, which uses similar projects as a basis for developing estimates for the current project
• Historical analysis - a bottom up estimation technique, which uses similar projects as a basis for developing estimates for the current project
• Parametric estimation - the use of parameters, multiplied by the number of hours for each parameter, to create a total estimation for the project
• Bottom-up estimation - gathering all the low level deliverables, activities, tasks and estimates and rolling them up to get a total for the project
• 3 point estimation - a weighted average estimate based on the optimistic, pessimistic and most likely estimate
• Rolling wave estimation - an iterative approach whereby the estimator refines his/her estimate as details for the activities become more available
• Expert Judgement - relying on the expertise of those who have performed similar work in the past
• Delphi estimation - a combination of expert judgement and history, whereby experts share their estimates with each other until a consensus is reached

Project estimation standards occur throughout the life of the project in the following life cycle stages:

• Prepare the estimate - this stage is the creation of the estimating approach, which includes the identification of activities, determining the techniques to be used to estimate, identifying the estimating team, preparing estimating inputs, and documenting any constraints to the estimates
• Create the estimate - this is the stage when estimating activity resources, activity durations, and costs are performed for the project
• Manage estimates - this stage involves many activities that are used to manage the estimate, including the change control process, calibrating the forecast and comparing actual results to the baseline
• Improve estimating process - as the project progresses, lessons learned are applied to the standard project estimation life cycle so that improvements can be utilized in future project estimations

Project Management: Risk Management

As all project managers know, the best project planning can never deliver a project in which all outcomes are known in advance of their occurrence.  As the saying goes; we hope for the best, but plan for the worst.  Project risk management is just that -- planning for the unknown.  And it is not an optional activity -- it is essential to successful project management.  

Project risk is any uncertain event or condition that, if it occurs, has a posiitve or negative effect on the project's objectives.

Project risk management includes the processes concerned with conducting risk identification, risk analysis, risk response and risk monitoring and control on a project.  Risk Management aims to identify and prioritize risks in advance of their occurrence, and provide action-oriented steps to increase the probability and impact of positive events during the course of the project, and to decrease the probability and impact of negative events during the course of the project. 

The general criteria for successful risk management during the course of a project are:

• Recognize the value of risk management - the management of risk must be recognized as a valuable discipline that provides a positive return on investment for the time and effort taken to assess risk
• Individual committment and responsibility - all resources on the project must take part in the risk management process
• Organizational committment - risk management must be in line with the overall goals and values of the organization
• Open and honest communication - potential project risk must be communicated early and often
• Risk effort scaled to project - the cost of project risk management must be in direct proportion to the value it will deliver on the project
• Integration with the other project management processes - risk management does not exist in the vaccum.  It must take place within the overall project management context

Project risk management includes the following steps:

• Plan risk management - defines the scope and objectives of the risk management process
• Identify risks
• Perform qualitative risk analysis - prioritize/rank the identified risks
• Perform quantitative risk analysis - evaluate the effect of risk on project outcomes
• Plan risk responses - identify response strategies and actions for all identified risks
• Monitor and control risk - implement agreed upon risk responses and assess overall effectivness of risk management plan throughout the life of the project